As filed with the Securities and Exchange Commission on
August 31, 1995
Registration No. 33-_____
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________
MERIDIAN BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 6711 23-2237529
(State or other juris- (Primary Standard (I.R.S. Employer
diction of incorporation Industrial Identification No.
or organization) Classification
Code Number)
35 North Sixth Street
Reading, Pennsylvania 19601
(610) 655-2000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Samuel A. McCullough
Chairman and Chief Executive Officer
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19601
(610) 655-2000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
________________________________________
Copies to:
Joseph M. Harenza, Esquire Ronald H. Janis, Esquire
David W. Swartz, Esquire Michael W. Zelenty, Esquire
Stevens & Lee Pitney, Hardin, Kipp & Szuch
111 North Sixth Street P.O. Box 1945
P.O. Box 679 Morristown, New Jersey 07962
Reading, Pennsylvania 19603
________________________________________
Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes
effective.<PAGE>
If the securities being registered on this Form are being offered
in connection with the formation of a holding company and there
is compliance with General Instruction G, check the following
box: [ ]
CALCULATION OF REGISTRATION FEE
_________________________________________________________________
Title of Amount to be Proposed Proposed Amount of
each class registered (1) maximum maximum registra-
of secur- offering aggregate tion fee (2)
ities to be price per offering
registered unit price
_________________________________________________________________
Common Stock, 10,954,185 Not Not
par value shares applicable applicable $142,782.14
$5.00 per (with rights)
share (and
associated
stock purchase
rights) (3)
_______________________________________________________________
(1) Based on the maximum number of shares of the Registrant's
common stock which may be issued in connection with the
proposed merger (the "Merger") of United Counties
Bancorporation ("UCB") with and into the Registrant. In
accordance with Rule 416, this Registration Statement shall
also register any additional shares of the Registrant's
common stock which may become issuable to prevent dilution
resulting from stock splits, stock dividends or similar
transactions as provided by the agreement relating to the
Merger.
(2) Estimated solely for purposes of calculating the
registration fee. Computed, in accordance with
Rule 457(f)(1), on the basis of the closing sale price of
the common stock of UCB on August 28, 1995 of $189.00 and
based on 2,148,150 shares of UCB common stock outstanding
and unexercised options to purchase 42,687 shares of UCB
common stock.
(3) Prior to the occurrence of certain events, the stock
purchase rights will not be evidenced separately from the
common stock.
____________________
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
________________________________________________________________
<PAGE>
MERIDIAN BANCORP, INC.
CROSS-REFERENCE SHEET
Pursuant to Item 501(b) of Regulation S-K showing the
location in the Proxy Statement/Prospectus of the
information required by Part I of Form S-4
Location in Proxy
Form S-4 Item No. Statement/Prospectus
A. Information About the
Transaction.
1. Forepart of Registration
Statement and Outside Front
Cover Page of Prospectus ... Outside front cover page
2. Inside Front and Outside
Back Cover Pages of
Prospectus ................. Table of Contents;
Available Information;
Incorporation of Certain
Documents by Reference
3. Risk Factors, Ratio of
Earnings to Fixed Charges
and Other Information ...... Summary
4. Terms of the Transaction ... Introduction; The Special
Meeting; The Merger;
Interests of Certain
Persons in the Merger;
Certain Related
Transactions; Description
of Meridian Capital
Securities; Comparison of
Shareholder Rights
5. Pro Forma Financial
Information ................ Summary; Selected Pro
Forma Combined Financial
Information
6. Material Contacts with the
Company Being Acquired ..... The Merger; Interests of
Certain Persons in the
Merger; Certain Related
Transactions
7. Additional Information
Required for Reoffering by
Persons and Parties Deemed
to be Underwriters ......... Not Applicable
8. Interests of Named Experts
and Counsel ................ Legal Matters
9. Disclosure of Commission
Position on Indemnification
for Securities Act
Liabilities ................ Not Applicable
B. Information About the Registrant.
10. Information with Respect to
S-3 Registrants ............ Summary; Description of
Meridian; Meridian
Selected Historical
Financial Information
11. Incorporation of Certain
Information by Reference ... Incorporation of Certain
Documents by Reference
12. Information with Respect to
S-2 or S-3 Registrants ..... Not Applicable
13. Incorporation of Certain
Information by Reference ... Not Applicable
14. Information with Respect
to Registrants Other Than
S-2 or S-3 Registrants ..... Not Applicable
C. Information About the Company
Being Acquired.
15. Information with Respect
to S-3 Companies ........... Description of UCB; UCB
Selected Historical
Financial Data
16. Information with Respect
to S-2 or S-3 Companies .... Not Applicable
17. Information with Respect to
Companies Other Than S-2 or
S-3 Companies .............. Not Applicable
D. Voting and Management Information.
18. Information if Proxies,
Consents or Authorizations
are to be Solicited ........ Incorporation of Certain
Documents by Reference;
Summary; The Special
Meeting; The Merger
19. Information if Proxies,
Consents or Authorizations
are not to be Solicited
or in an Exchange Offer .... Not Applicable
<PAGE>
[LETTERHEAD OF UNITED COUNTIES BANCORPORATION]
September __, 1995
Dear Shareholder:
You are cordially invited to attend a Special Meeting of the
shareholders of United Counties Bancorporation ("UCB") which will
be held on Wednesday, November 1, 1995, at 10:00 a.m., local
time, at the Corporate Headquarters of UCB, Four Commerce Drive,
Cranford, New Jersey 07016.
The purpose of the Special Meeting is to consider and vote
upon the Agreement and Plan of Merger dated as of May 23, 1995
(the "Merger Agreement"), between UCB and Meridian Bancorp, Inc.
("Meridian"), providing for the merger of UCB with and into
Meridian (the "Merger"). Meridian is a bank holding company
headquartered in Reading, Pennsylvania. Through its wholly owned
banking subsidiaries, Meridian currently maintains over
300 banking offices in eastern Pennsylvania, southern New Jersey
and the State of Delaware.
If the Merger is approved and completed, each UCB
shareholder will receive 5.00 shares of Meridian Common Stock for
each share of UCB Common Stock such shareholder owns of record.
On September ___, 1995, the last sale price for Meridian common
stock, as reported on the NASDAQ Stock Market, was $_____ per
share.
The attached Proxy Statement/Prospectus contains important
information concerning the Merger. We urge you to give it your
careful attention.
The Board of Directors of UCB has carefully considered and
approved the Merger Agreement and believes that the Merger is in
the best interests of UCB and its shareholders. ACCORDINGLY,
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR
APPROVAL OF THE MERGER AGREEMENT.
YOUR VOTE IS IMPORTANT. You are urged to sign, date and
mail the enclosed proxy card promptly in the postage-prepaid
envelope provided. If you attend the Special Meeting, you may
vote in person even if you have already mailed your proxy card.
On behalf of the Board of Directors and our employees, I
wish to thank you for your support.
Sincerely yours,
Eugene H. Bauer
Chairman of the Board and
Chief Executive Officer
<PAGE>
UNITED COUNTIES BANCORPORATION
Four Commerce Drive
Cranford, New Jersey 07016
____________________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on November 1, 1995
____________________
A Special Meeting of Shareholders of United Counties
Bancorporation ("UCB") will be held on Wednesday, November 1,
1995, at 10:00 a.m., local time, at the Corporate Headquarters of
UCB, Four Commerce Drive, Cranford, New Jersey 07016, to consider
the following matters:
1. The approval and adoption of the Agreement and
Plan of Merger, dated as of May 23, 1995 (the "Merger
Agreement"), between UCB and Meridian Bancorp, Inc.
("Meridian"), a copy of which is attached as Annex A to the
accompanying Proxy Statement/Prospectus, providing for the
merger of UCB with and into Meridian (the "Merger"),
pursuant to which each share of the common stock, par value
$1.00 per share, of UCB outstanding at the closing of the
Merger will be converted into and become a right to receive
5.00 shares of the common stock, par value $5.00 per share,
of Meridian and related stock purchase rights.
2. Adjournment of the Special Meeting, if necessary,
to permit further solicitation of proxies in the event there
are not sufficient votes at the time of the Special Meeting
to constitute a quorum or to approve the Merger Agreement.
3. Such other matters as may properly be brought
before the Special Meeting or any adjournments thereof.
The Board of Directors of UCB has fixed the close of
business on September 15, 1995, as the record date for
determining stockholders entitled to notice of, and to vote at,
the Special Meeting and any adjournments thereof.
A Proxy Statement/Prospectus is set forth on the
following pages and a form of proxy is enclosed herewith. To
ensure that your vote is counted, please complete, sign, date and
return the proxy in the enclosed return envelope, whether or not
you plan to attend the Special Meeting in person. If you attend
the Special Meeting, you may revoke your proxy in accordance with
the procedures described in the Proxy Statement/Prospectus and
vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
___________________________________
Alice R. Cadby
Corporate Secretary
Cranford, New Jersey
September __, 1995
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND RETURN
PROMPTLY THE ENCLOSED PROXY CARD, WHETHER OR NOT YOU PLAN TO
ATTEND THE SPECIAL MEETING. PLEASE DO NOT SEND IN ANY
CERTIFICATES FOR YOUR SHARES AT THIS TIME.
<PAGE>
PROXY STATEMENT
for
Special Meeting of Stockholders of
United Counties Bancorporation
to be held on November 1, 1995
Four Commerce Drive
Cranford, New Jersey 07016
PROSPECTUS of
Meridian Bancorp, Inc.
Common Stock
35 North Sixth Street
Reading, Pennsylvania 19601
This Proxy Statement/Prospectus is being furnished by
United Counties Bancorporation, a New Jersey corporation ("UCB"),
to the holders of UCB common stock, no par value $1.00 stated
value per share ("UCB Common Stock"), as a Proxy Statement in
connection with the solicitation of proxies by UCB's Board of
Directors for use at a Special Meeting of Stockholders of UCB to
be held at 10:00 a.m., local time, on Wednesday, November 1,
1995, at Four Commerce Drive, Cranford, New Jersey 07016 (the
"Special Meeting"), and at any adjournment or adjournments
thereof. In the event there are not sufficient shares
represented for a quorum or votes to approve the Merger Agreement
at the Special Meeting, the Special Meeting may be adjourned to
permit further solicitation.
This Proxy Statement/Prospectus, the accompanying
Notice of Special Meeting and form of Proxy are first being
mailed to the stockholders of record of UCB on or about
September __, 1995.
The purpose of the Special Meeting is to consider and
vote upon a proposal to approve the Agreement and Plan of Merger,
dated as of May 23, 1995 (the "Merger Agreement"), between UCB
and Meridian Bancorp, Inc. ("Meridian"), pursuant to which UCB
will merge with and into Meridian (the "Merger"), subject to the
terms and conditions contained therein. See "SUMMARY," "THE
MERGER AGREEMENT," and a copy of the Merger Agreement which is
attached as ANNEX A to this Proxy Statement/Prospectus.
Upon consummation of the Merger each outstanding share
of UCB Common Stock will be converted into and represent the
right to receive 5.00 shares (the "Exchange Ratio") of Meridian's
common stock, $5.00 par value per share ("Meridian Common
Stock"), subject to certain adjustments. Pursuant to the terms
of the Merger Agreement, cash will be paid in lieu of fractional
shares of Meridian Common Stock. For a more complete description
of the Merger Agreement and the terms of the Merger, see "THE
MERGER."
Meridian Common Stock is traded on the NASDAQ Stock
Market under the symbol "MRDN." On May 23, 1995, the last
business day prior to public announcement of the execution of the
Merger Agreement, the closing price of Meridian Common Stock was
$33.00 per share. On September __, 1995, such price was $_____.
UCB's Common Stock is listed on the NASDAQ Small-Cap Market under
the symbol "UCTC." On May 23, 1995, the last business day prior
to public announcement of the execution of the Merger Agreement,
the last reported sale price per share of UCB Common Stock on the
NASDAQ Small-Cap Market was $127.50. On September __, 1995, such
price was $_____. See "SELECTED CONSOLIDATED FINANCIAL AND OTHER
DATA -- Comparative Per Share Data." UCB stockholders are urged
to obtain current market quotations for Meridian and UCB Common
Stock. Because the Exchange Ratio is fixed, UCB stockholders are
not assured of receiving any specific market value of Meridian
Common Stock. The price of Meridian Common Stock at the
effective date of the Merger may be higher or lower than the
market price at the time of entering into the Merger Agreement,
at the time of mailing this Proxy Statement/Prospectus or at the
time of the Special Meeting.
Meridian has filed a Registration Statement pursuant to
the Securities Act of 1933, as amended (the "Securities Act"),
covering the shares of Meridian Common Stock which will be issued
in connection with the Merger. In addition to constituting the
UCB Proxy Statement for the Special Meeting, this document
constitutes a Prospectus of Meridian with respect to the Meridian
Common Stock to be issued if the Merger is consummated.
THE SHARES OF MERIDIAN COMMON STOCK OFFERED HEREBY HAVE
NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE SHARES OF MERIDIAN COMMON STOCK OFFERED HEREBY ARE
NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF A BANK OR
SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
________________
The date of this Proxy Statement/Prospectus is
September __, 1995.
<PAGE>
Table of Contents
Page
AVAILABLE INFORMATION......................................... 1
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE.................................................. 3
SUMMARY....................................................... 6
The Companies........................................... 6
Meridian.......................................... 6
UCB............................................... 7
The Special Meeting..................................... 7
Vote Requirements................................. 8
The Merger.............................................. 8
Effect of Merger.................................. 8
Recommendation of the Board of Directors and Reasons
for the Merger.................................... 10
Opinion of Financial Advisor...................... 10
Representations, Warranties, and Covenants........ 11
Conditions to the Merger.......................... 11
Termination; Effect of Termination................ 11
Differences in Shareholder Rights................. 12
Absence of Dissenters' Rights of Appraisal........ 12
Management and Operations after the Merger; Bank
Merger............................................ 13
Certain Related Transactions............................ 14
Stock Option Agreement............................ 14
No Solicitation of Transactions......................... 15
Interests of Certain Persons in the Merger.............. 16
Meridian Selected Historical Consolidated Financial
Data.................................................... 16
UCB Selected Historical Consolidated Financial Data..... 16
Comparative Per Common Share Data....................... 17
Pro Forma Combined Condensed Financial Data....... 21
Market Value of Securities.............................. 23
Market Price and Dividend Information................... 23
INTRODUCTION.................................................. 24
DESCRIPTION OF MERIDIAN....................................... 25
General................................................. 25
Meridian.......................................... 25
Banking........................................... 25
Financial Services................................ 26
Other............................................. 26
Market Price of and Dividends on Meridian Common Stock.. 27
Repurchase of Meridian Common Stock..................... 28
DESCRIPTION OF UCB............................................ 28
General................................................. 28
UCB............................................... 28
UCTC.............................................. 29
Market Price of and Dividends on UCB Common Stock and
Related Stockholder Matters............................. 30
MERIDIAN SELECTED HISTORICAL FINANCIAL DATA................... 32
UCB SELECTED HISTORICAL FINANCIAL DATA........................ 37
SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION............. 40
Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 1995........................................... 42
Pro Forma Condensed Consolidated Statements of Income
for the Six Months Ended June 30, 1995 and June 30, 1994
and the Years Ended December 31, 1994, 1993 and 1992.......... 45
Pro Forma Consolidated Capitalization as of June 30, 1995..... 52
THE SPECIAL MEETING........................................... 54
Matters to be Considered at the Special Meeting......... 54
Votes Required; Quorum.................................. 54
Voting of Proxies....................................... 55
Revocability of Proxies................................. 56
Record Date; Stock Entitled to Vote..................... 56
Appraisal Rights........................................ 56
Solicitation of Proxies................................. 56
THE MERGER.................................................... 58
Background of and Reasons for the Merger;
Recommendation of the UCB Board of Directors............ 58
Background of the Merger.......................... 58
Reasons for the Merger............................ 61
Terms of the Merger..................................... 65
General........................................... 65
Exchange Ratio.................................... 66
UCB Stock Options................................. 66
Opinion of Financial Advisor............................ 67
Effective Date of the Merger............................ 73
Exchange of UCB Stock Certificates...................... 73
Conditions to the Merger................................ 75
Regulatory Approvals.................................... 76
Representations and Warranties.......................... 78
Business Pending the Merger............................. 79
Dividends............................................... 82
No Solicitation of Transactions......................... 83
Amendment; Waivers...................................... 83
Termination; Effect of Termination...................... 84
Management and Operations after the Merger.............. 85
Subsidiary Bank Merger............................ 85
Directors and Officers After the Merger........... 85
Consolidation of Operations: Projected Operating
Cost Savings and Revenue Enhancements............. 87
Post-Merger Dividend Policy....................... 87
Other............................................. 88
Employee Benefits....................................... 88
Accounting Treatment.................................... 90
Certain Federal Income Tax Consequences................. 91
Expenses................................................ 92
Resale of Meridian Common Stock......................... 93
Dividend Reinvestment Plan.............................. 93
INTERESTS OF CERTAIN PERSONS IN THE MERGER.................... 94
Stock Options........................................... 94
Employment Agreements................................... 94
Directors & Officers Insurance; Indemnification......... 97
CERTAIN RELATED TRANSACTIONS.................................. 98
Stock Option Agreement.................................. 98
DESCRIPTION OF MERIDIAN CAPITAL SECURITIES.................... 100
Common Stock............................................ 100
Preferred Stock......................................... 102
Capital Notes........................................... 102
Shareholder Rights Plan................................. 103
Special Charter and Pennsylvania Corporate
Law Provisions.................................... 104
COMPARISON OF SHAREHOLDER RIGHTS.............................. 106
General................................................. 106
Authorized Capital...................................... 106
Directors............................................... 107
Removal........................................... 107
Nomination........................................ 107
Election of Directors............................. 108
Cumulative Voting................................. 109
Limited Liability................................. 109
Indemnification................................... 109
Shareholders' Meetings.................................. 110
Shareholder Rights Plan................................. 111
Antitakeover Provisions................................. 111
Required Shareholder Vote............................... 115
General........................................... 115
Fundamental Changes............................... 116
Amendment of Articles or Certificate
of Incorporation.................................. 117
Amendment of Bylaws..................................... 118
Mandatory Tender Offer Provision........................ 118
Dissenters' Rights...................................... 119
Dividends............................................... 120
Voluntary Dissolution................................... 121
Preemptive Rights....................................... 122
ADJOURNMENT OF SPECIAL MEETING................................ 123
EXPERTS....................................................... 124
LEGAL MATTERS................................................. 125
STOCKHOLDER PROPOSALS......................................... 125
ANNEX A
MERGER AGREEMENT BETWEEN MERIDIAN BANCORP, INC.
AND UNITED COUNTIES BANCORPORATION............................ A-1
ANNEX B
STOCK OPTION AGREEMENT BETWEEN
MERIDIAN BANCORP, INC. AND UNITED COUNTIES BANCORPORATION..... B-1
ANNEX C
OPINION OF GOLDMAN, SACHS & CO................................. C-1
<PAGE>
No persons have been authorized to give any information
or to make any representations other than those contained in this
Proxy Statement/Prospectus in connection with the solicitation of
proxies or the offering of securities made hereby and, if given
or made, such information or representation must not be relied
upon as having been authorized by Meridian or UCB. This Proxy
Statement/Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, any securities, or the
solicitation of a proxy, in any jurisdiction to or from any
person to whom it is not lawful to make any such offer or
solicitation in such jurisdiction. Neither the delivery of this
Proxy Statement/Prospectus nor any distribution of securities
made hereunder shall, under any circumstances, create an
implication that there has been no change in the affairs of
Meridian or UCB since the date hereof or that the information
contained herein is correct as of any time subsequent to its
date.
All information concerning Meridian and its
subsidiaries contained herein, incorporated herein by reference
or supplied herewith has been furnished by Meridian, and all
information concerning UCB and its subsidiaries contained herein,
incorporated herein by reference or supplied herewith has been
furnished by UCB. NO ASSURANCES CAN BE GIVEN BY EITHER UCB OR
MERIDIAN AS TO THE FUTURE VALUE OF MERIDIAN COMMON STOCK OR THAT
MERIDIAN WILL REALIZE ITS REVENUE ENHANCEMENT, COST SAVINGS OR
OTHER POST-MERGER GOALS. See "THE MERGER--Consolidation of
Operations: Projected Operating Cost Savings and Revenue
Enhancement."
AVAILABLE INFORMATION
Meridian and UCB are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith file reports,
proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by Meridian and UCB with
the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and should
be available for inspection and copying at the following regional
offices of the Commission: New York Regional Office, 7 World
Trade Center, Suite 1300, New York, New York 10048; and the
Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies
of such material also can be obtained at prescribed rates from
the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549.
Meridian has filed with the Commission a Registration
Statement on Form S-4 (together with any amendments thereto, the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Meridian
Common Stock to be issued pursuant to the Merger Agreement. This
Proxy Statement/Prospectus does not contain all the information
set forth in the Registration Statement and the exhibits thereto.
Such additional information may be obtained from the Commission's
principal office in Washington, D.C. Statements contained in
this Proxy Statement/Prospectus or in any document incorporated
in this Proxy Statement/Prospectus by reference or supplied
herewith as to the contents of any contract or other document
referred to herein or therein are not necessarily complete, and,
in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration
Statement or such other document, each such statement being
qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
The following documents filed with the Commission by
Meridian (File No. 0-12364) pursuant to the Exchange Act are
incorporated by reference in this Proxy Statement/Prospectus:
1. Meridian's Annual Report on Form 10-K for the year
ended December 31, 1994 (including certain
information contained in Meridian's Proxy
Statement dated March 17, 1995 used in connection
with Meridian's 1995 Annual Meeting of
Shareholders and incorporated by reference in the
Form 10-K).
2. Meridian's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1995 and June 30, 1995.
3. Meridian's Current Reports on Form 8-K dated
May 23, 1995 and June 28, 1995.
4. Meridian's Registration Statement on Form 8-A
dated August 14, 1989, as amended on July 25,
1994, with respect to Preferred Stock Purchase
Rights registered pursuant to Section 12(g) of the
Exchange Act.
The following documents filed with the Commission by
UCB (File No. 0-11282) pursuant to the Exchange Act are
incorporated by reference in this Proxy Statement/Prospectus:
1. UCB's Annual Report on Form 10-K for the year
ended December 31, 1994 (including certain
information contained in UCB's Proxy Statement
dated March 10, 1995 used in connection with UCB's
1995 Annual Meeting of Shareholders and
incorporated by reference in the Form 10-K).
2. UCB's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1995 and June 30, 1995.
3. UCB's Current Reports on Form 8-K filed on June 8,
1995 and on August 8, 1995.
4. The description of UCB Common Stock set forth in
UCB's Registration Statement filed on Form 8-A
filed pursuant to Section 12 of the Exchange Act,
and any amendment or report filed for the purpose
of updating such description.
All documents and reports filed by Meridian and UCB
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Proxy Statement/Prospectus and prior to
the date of the special meeting of UCB's shareholders shall be
deemed to be incorporated by reference in this Proxy
Statement/Prospectus and to be a part hereof from the dates of
filing of such documents or reports. Any statement contained in
a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes
of this Proxy Statement/Prospectus to the extent that a statement
contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Proxy
Statement/Prospectus.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS
BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED
HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS
UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE)
ARE AVAILABLE, WITHOUT CHARGE, TO ANY PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS
DELIVERED, ON WRITTEN OR ORAL REQUEST. DOCUMENTS RELATING TO
MERIDIAN MAY BE REQUESTED FROM MERIDIAN BANCORP, INC., 35 NORTH
SIXTH STREET, READING, PENNSYLVANIA 19601 (TELEPHONE NUMBER
(610) 655-2438), ATTENTION: INVESTOR RELATIONS. DOCUMENTS
RELATING TO UCB MAY BE REQUESTED FROM UNITED COUNTIES
BANCORPORATION, FOUR COMMERCE DRIVE, CRANFORD, NEW JERSEY 07016
(TELEPHONE NUMBER (908) 931-6844), ATTENTION: CORPORATE
SECRETARY. IN ORDER TO ENSURE DELIVERY OF THE DOCUMENTS PRIOR TO
THE SPECIAL MEETING, REQUESTS SHOULD BE RECEIVED BY SEPTEMBER 15,
1995.
<PAGE>
SUMMARY
The following is a summary of certain information
contained elsewhere in this Proxy Statement/Prospectus.
Reference is made to, and this summary is qualified in its
entirety by, the more detailed information contained or
incorporated by reference in this Proxy Statement/Prospectus and
the Annexes hereto.
The Companies
Meridian
Meridian Bancorp, Inc. ("Meridian") is a Pennsylvania
business corporation and a multi-bank holding company
headquartered in Reading, Pennsylvania. Its banking subsidiaries
consist of Meridian Bank, Delaware Trust Company and Meridian
Bank, New Jersey ("MBNJ"). At June 30, 1995, Meridian and its
subsidiaries had total consolidated assets, deposits and
shareholders' equity of approximately $14.9 billion,
$11.5 billion and $1.24 billion, respectively, and, in terms of
both assets and deposits, Meridian was the fourth largest bank
holding company headquartered in Pennsylvania. For additional
information on Meridian and its subsidiaries see "AVAILABLE
INFORMATION," "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE,"
"RECENT DEVELOPMENTS-MERIDIAN," "MERIDIAN SELECTED HISTORICAL
FINANCIAL DATA" and "DESCRIPTION OF MERIDIAN."
The principal executive offices of Meridian are located
at 35 North Sixth Street, Reading, Pennsylvania 19601, and its
telephone number is (610) 655-2000. See "DESCRIPTION OF
MERIDIAN -- General."
UCB
United Counties Bancorporation ("UCB") is a New Jersey
corporation and a single bank holding company headquartered in
Cranford, New Jersey. At June 30, 1995 UCB had total
consolidated assets, deposits and shareholders' equity of
approximately $1.6 billion, $1.3 billion and $193.5 million,
respectively. UCB's principal operating subsidiary is United
Counties Trust Company ("UCTC"). For additional information
concerning UCB, its business, financial condition, and results of
operations, see "AVAILABLE INFORMATION," "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE," "RECENT DEVELOPMENTS -- UCB,"
"UCB SELECTED HISTORICAL FINANCIAL DATA" and "DESCRIPTION OF
UCB."
The principal executive offices of UCB are located at
Four Commerce Drive, Cranford, New Jersey 07016, and its
telephone number is (908) 931-6600. See "DESCRIPTION OF UCB --
General."
The Special Meeting
A special meeting of the stockholders of UCB will be
held at the Corporate Headquarters of UCB, Four Commerce Drive,
Cranford, New Jersey 07016, on Wednesday, November 1, 1995, at
10:00 a.m., local time (the "Special Meeting").
At the Special Meeting, holders of UCB's common stock,
no par value $1.00 stated value per share (the "UCB Common
Stock"), will consider and vote upon the approval and adoption of
the Agreement and Plan of Merger, dated as of May 23, 1995 (the
"Merger Agreement"), between Meridian and UCB, a copy of which is
attached as Annex A to this Proxy Statement/Prospectus, providing
for the merger of UCB with and into Meridian (the "Merger"). In
addition to the Merger Agreement, stockholders will be asked to
approve a proposal to adjourn the Special Meeting, if necessary,
to permit further solicitation of proxies. See "ADJOURNMENT OF
SPECIAL MEETING." UCB stockholders will also consider and vote
upon any other matter that may properly come before the Special
Meeting. See "THE SPECIAL MEETING -- Matters to be Considered at
the Meeting."
Vote Requirements
The Merger will require the approval of the Merger
Agreement by the affirmative vote of 66-2/3% of the outstanding
shares of UCB Common Stock. The directors, certain executive
officers and certain affiliates of UCB have agreed to be present
(in person or by proxy) at the Special Meeting, vote all shares
of UCB Common Stock which they own for approval and adoption of
the Merger Agreement. At August 29, 1995, such directors,
executive officers and affiliates of UCB owned and had sole
voting power with respect to approximately 483,708 shares of UCB
Common Stock, or approximately 22.5% of the outstanding shares of
UCB Common Stock which are entitled to be voted at the Special
Meeting. At August 29, 1995, such directors, executive officers
and affiliates of UCB had shared voting power with respect to
approximately 205,847 shares of UCB Common Stock, or
approximately 9.6% of the outstanding shares of UCB Common Stock
which are entitled to be voted at the Special Meeting. See "THE
SPECIAL MEETING -- Votes Required; Quorum."
The Merger
Effect of Merger
Pursuant to the Merger Agreement, UCB will be merged
into Meridian with Meridian surviving the Merger. At the
effective date of the Merger (the "Effective Date"), each
outstanding share of UCB Common Stock will be automatically
converted into and become a right to receive 5.00 shares of
Meridian Common Stock at a fixed exchange ratio (the "Exchange
Ratio"). See "THE MERGER -- Terms of the Merger."
In connection with the Merger, options to purchase
47,601 shares of UCB Common Stock granted under UCB's existing
employee stock option plans prior to the date of the Merger
Agreement ("UCB Options") which remain unexercised on the
Effective Date of the Merger will be converted, on the Effective
Date, into options to acquire 5.00 shares of Meridian Common
Stock for each share of UCB Common Stock purchasable under the
terms of UCB's existing stock option plan at an exercise price
per share of Meridian Common Stock equal to the present stated
exercise price of such option divided by 5.00. Due to provisions
in UCB's employee stock option plans providing for accelerated
vesting in the event of a "change in control" of UCB, the UCB
Options will automatically become fully vested on the Effective
Date of the Merger. See "THE MERGER -- Terms of the Merger."
The Merger is intended to qualify as a pooling of
interests for financial accounting purposes and is expected to
constitute a tax-free reorganization for federal income tax
purposes. See "THE MERGER -- Accounting Treatment" and "THE
MERGER -- Federal Income Tax Consequences."
The Merger Agreement, subject to certain restrictions,
permits UCB to pay a quarterly cash dividend of $1.85 per share
of UCB Common Stock outstanding on each March 1, June 1,
September 1 and December 1 prior to the Effective Date; provided,
however, that UCB is not permitted, without Meridian's prior
written consent, to pay a dividend in or for any quarter in which
the Effective Date is or is expected to be on or before
Meridian's record date for payment of its regular quarterly cash
dividend. See "THE MERGER -- Dividends."
Recommendation of the Board of Directors and Reasons
for the Merger
The Board of Directors of UCB unanimously recommends
that its stockholders approve and adopt the Merger Agreement.
The Board of Directors of UCB believes that the terms of the
Merger are fair and in the best interests of UCB stockholders and
has unanimously approved the Merger Agreement. The Board of
Directors of UCB believes that the Merger will benefit UCB's
stockholders by providing them with a more liquid investment than
that represented by UCB Common Stock. In addition, the UCB Board
of Directors believes that UCB will be in better position to
participate in the latest technological advancements, and UCB's
customers will have available a broader range of products and
services. For information on the matters considered by UCB's
Board of Directors in approving and recommending the Merger, see
"THE MERGER -- Background of and Reasons for the Merger;
Recommendation of the UCB Board of Directors."
Opinion of Financial Advisor
Goldman, Sachs & Co. ("Goldman Sachs") has delivered
its written opinion to the Board of Directors of UCB that, as of
the date hereof, the Exchange Ratio to be received pursuant to
the Merger Agreement is fair to the holders of UCB Common Stock.
The full text of the written opinion of Goldman Sachs,
which sets forth assumptions made, matters considered and
limitations on the review undertaken in connection with the
opinion, is attached hereto as Annex C and is incorporated herein
by reference. Holders of shares of UCB Common Stock are urged
to, and should, read such opinion in its entirety. See "THE
MERGER -- Opinion of Financial Advisor."
Representations, Warranties, and Covenants
The Merger Agreement contains representations,
warranties, and covenants customary for transactions similar to
the Merger. See "THE MERGER -- Conditions," "-- Representations
and Warranties," and "-- Management and Operations After the
Merger."
Conditions to the Merger
The obligations of Meridian and UCB to complete the
Merger are subject to various conditions, including, among
others, (i) obtaining required stockholder approval, obtaining
required approvals from the Board of Governors of the Federal
Reserve System (the "Federal Reserve"), the Federal Deposit
Insurance Corporation (the "FDIC"), and the New Jersey Department
of Banking (the "NJDOB"), (ii) the absence since March 31, 1995
of any material adverse change in the consolidated assets,
business, consolidated financial condition or consolidated
results of operations, taken as a whole, of the other party and
its subsidiaries, (iii) receipt of an opinion of counsel at the
closing of the Merger with respect to certain federal income tax
consequences of the Merger, (iv) receipt of a letter from
Meridian's independent accountants to the effect that the Merger
qualifies for "pooling of interests" accounting treatment and
(v) other conditions precedent customary in transactions such as
the Merger. No assurance can be given that all such conditions
will be met. See "THE MERGER -- Conditions to the Merger."
Termination; Effect of Termination
The Merger Agreement may be terminated at any time
prior to the Effective Date by (a) the mutual written consent of
Meridian and UCB or (b) by either party if (i) the Effective Date
has not occurred prior to May 23, 1996, unless such fact is due
to the failure of the party seeking termination to perform or
observe its agreements set forth in the Merger Agreement and
required to be performed or observed prior to the Effective Date,
(ii) any regulatory authority whose approval or consent has been
requested has informed either party in writing that such approval
or consent is unlikely to be granted, unless such fact shall be
due to the failure of the party seeking termination to perform or
observe its agreements set forth in the Merger Agreement and
required to be performed or observed prior to the Effective Date,
(iii) the stockholders of UCB have failed to approve the Merger
Agreement, unless the failure of the party seeking termination to
perform or observe its agreements set forth in the Merger
Agreement, or (iv) Meridian and UCB have reasonably agreed that
any condition precedent to closing set forth in the Merger
Agreement cannot reasonably be met. See "THE MERGER --
Termination; Effect of Termination."
Differences in Shareholder Rights
Upon completion of the Merger, stockholders of UCB will
become shareholders of Meridian and their rights as such will be
governed by Meridian's Articles of Incorporation and Bylaws and
by Pennsylvania law. The rights of shareholders of Meridian are
different in certain respects from the rights of stockholders of
UCB. See "COMPARISON OF SHAREHOLDER RIGHTS."
Absence of Dissenters' Rights of Appraisal
Holders of shares of UCB Common Stock are not entitled
to dissenters' appraisal rights in connection with the Merger
under applicable law. See "THE SPECIAL MEETING -- Appraisal
Rights."
Management and Operations after the Merger; Bank Merger
The Board of Directors of Meridian in office
immediately prior to completion of the Merger will remain as
Meridian's Board of Directors upon completion of the Merger,
together with two other persons who are designated by UCB and who
are reasonably acceptable to Meridian. The executive officers of
Meridian in office immediately prior to completion of the Merger
will remain as such upon completion of the Merger. See "THE
MERGER -- Management and Operations After the Merger."
In connection with the Merger, MBNJ and UCTC entered
into a Plan of Merger dated as of May 23, 1995 (the "Bank Plan of
Merger"), pursuant to which, concurrently with or as soon as
practicable after completion of the Merger, UCTC will merge with
and into MBNJ (the "Bank Merger"). The Bank Plan of Merger will
terminate automatically if the Merger Agreement is terminated.
See "THE MERGER -- Management and Operations After the Merger --
Subsidiary Bank Merger."
The Board of Directors of MBNJ in office immediately
prior to completion of the Bank Merger will remain as MBNJ's
Board of Directors upon completion of the Bank Merger, together
with Albert W. Bossert, Anton J. Campanella, Edward J. Hobbie,
John E. Holobinko, William C. Johnson, Jr., Robert G. Kenney,
Henry G. Largey, Donald S. Nowicki and Maureen E. Staub, each of
whom is a current director of UCTC. The other current directors
of UCTC are Edward A. Kammler, Jr. and William G. Palermo, each
of whom has reached Meridian's mandatory director retirement age,
and Eugene H. Bauer, who will become a consultant to Meridian on
a limited basis following the Effective Date. The officers of
MBNJ duly elected and holding office immediately prior to the
completion of the Bank Merger will remain as such upon completion
of the Bank Merger, along with such officers of UCTC as MBNJ
appoints as officers of MBNJ.
Under the terms of the Merger Agreement, Meridian has
agreed to cause MBNJ to relocate its executive offices to the
location of UCB's corporate headquarters in Cranford, New Jersey.
Meridian expects to realize certain revenue
enhancements following the Merger as a result of the expansion of
products and services and increased lending activities. Meridian
also expects to achieve certain cost savings following the Merger
principally through the consolidation of certain operations and
the elimination of redundant costs. Because of the uncertainties
associated with merging two institutions located in contiguous
markets, and changes in the regulatory environment and economic
conditions, no assurances can be given as to whether any
particular level of revenue enhancements or cost savings will, in
fact, be realized or as to the ultimate timing of any such
revenue enhancements or cost savings. See "THE MERGER --
Management and Operations After the Merger; Consolidation of
Operations: Projected Operating Cost Savings."
Certain Related Transactions
Stock Option Agreement
As a condition to entering into the Merger Agreement,
UCB granted Meridian an option to purchase 375,000 shares of UCB
Common Stock pursuant to a stock option agreement, dated May 23,
1995 (the "Stock Option Agreement"). The option may be exercised
by Meridian upon the occurrence of specified events which have
the potential for a third party to effect an acquisition of
control of UCB prior to the termination of the Merger Agreement
and, under certain circumstances, for a period of one year
thereafter. The exercise price per share to purchase UCB Common
Stock under the option is equal to the lower of $125.00 or the
lowest price per share that a person or group, other than
Meridian or an affiliate of Meridian, paid or offers to pay for
UCB Common Stock upon the occurrence of one of the specified
events which triggers exercise of the option. Acquisitions of
shares of UCB Common Stock pursuant to the exercise of the option
would be subject to prior regulatory approval under certain
circumstances. See "CERTAIN RELATED TRANSACTIONS -- Stock Option
Agreement."
No Solicitation of Transactions
Except as set forth below, UCB has agreed in the Merger
Agreement that it will not solicit or engage in any discussions
with or respond to any person other than Meridian concerning any
acquisition of UCB or any of its subsidiaries except for
responses in connection with investor relations or pursuant to
inquiries of government regulatory authorities. Prior to
September ___, 1995 (the date of effectiveness of the
registration statement of which this Proxy Statement/Prospectus
forms a part), the Merger Agreement permitted UCB to engage in
discussions or negotiations with, or respond to requests for
information, inquiries or other communications from, any person
other than Meridian concerning an acquisition of UCB or its
subsidiaries to the extent such engagement or response may have
been legally required for the discharge by UCB's Board of
Directors of its fiduciary duty. See "THE MERGER -- No
Solicitation of Transactions." In addition, the directors of
UCB, together with the executive officers of UCB and certain of
their affiliates, have agreed to be present at the Special
Meeting (in person or by proxy) and to vote their shares of UCB
Common Stock in favor of the Merger Agreement. See "THE
MEETINGS -- Matters to be Considered at the Meetings."
The Stock Option Agreement and the agreements of UCB
and of such directors, executive officers, and certain affiliates
of UCB regarding the Special Meeting may have the effect of
discouraging persons who might now, or prior to the Effective
Date, be interested in acquiring all of or a significant interest
in UCB from considering or proposing such an acquisition, even if
such persons were willing to pay a higher price per share for UCB
Common Stock than the price per share implicit in the Merger
consideration at that time. See "CERTAIN RELATED TRANSACTIONS --
Stock Option Agreement."
Interests of Certain Persons in the Merger
Certain directors and executive officers of UCB are
entitled to substantial payments pursuant to employment
agreements and benefit plans if they resign or their employment
is terminated following execution of the Merger Agreement. In
addition, Mr. Eugene H. Bauer, Chairman of UCB and UCTC, will
resign all positions with UCB and UCTC on the Effective Date of
the Merger and will become a consultant to Meridian on a limited
basis after the Merger. Certain directors and executive officers
of UCB are also the holders of employee stock options to acquire
UCB Common Stock which will be converted into options to acquire
Meridian Common Stock. Also, Meridian has agreed to indemnify
and maintain director and officer insurance coverage for a
specified period of time after the Effective Date for persons who
served as directors and officers of UCB. See "INTERESTS OF
CERTAIN PERSONS IN THE MERGER."
Meridian Selected Historical Consolidated Financial Data
Selected unaudited historical consolidated financial
data with respect to Meridian is set forth in this Proxy
Statement/Prospectus at "MERIDIAN SELECTED HISTORICAL FINANCIAL
DATA."
UCB Selected Historical Consolidated Financial Data
Selected unaudited historical consolidated financial
data with respect to UCB is set forth in this Proxy
Statement/Prospectus at "UCB SELECTED HISTORICAL FINANCIAL DATA."
Comparative Per Common Share Data
The following table sets forth certain unaudited
comparative per share data relating to book value per common
share, cash dividends declared per common share, and income from
continuing operations per common share, (i) on an historical
basis for Meridian and UCB, (ii) on a pro forma basis per share
of Meridian Common Stock to reflect completion of the Merger, and
(iii) on an equivalent pro forma basis per share of UCB Common
Stock to reflect completion of the Merger. The following
equivalent per share data assume the Exchange Ratio of
5.00 shares of Meridian Common Stock for each share of UCB Common
Stock outstanding.
During the second quarter, 1995, Meridian recorded a
restructuring charge of $32.0 million ($20.8 million after tax).
The restructuring charge related to the implementation of a
program intended to reduce Meridian's performance ratio (non-
interest expense as a percentage of income) from its current
level to 59.9% or lower by the end of the first quarter of 1996.
The restructuring charge is reflected in the historical and
historical pro forma data at and for the six months ended
June 30, 1995. The historical pro forma data at and for the six
months ended June 30, 1995 includes a gain by UCB on exchange of
securities for sale of $12.0 million pre-tax ($7.6 million after-
tax). Meridian also expects to achieve certain operating cost
savings and revenue enhancements as a result of the Merger. Such
cost savings and revenue enhancements are not reflected in the
historical pro forma information set forth below. See "THE
MERGER -- Management and Operations After the Merger." This
information should be read in conjunction with the consolidated
financial statements of Meridian and UCB, including the notes
thereto, incorporated by reference in this Proxy
Statement/Prospectus and the other financial data appearing
elsewhere in this Proxy Statement/Prospectus. The information
set forth below is not necessarily indicative of the results of
operations of future periods or future combined financial
position. See "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE"
and "AVAILABLE INFORMATION."
<PAGE>
<TABLE>
<CAPTION>
At or for the
Six Months
Ended June 30, At or for the Year Ended December 31,
---------------- -------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Book Value Per Common Share
Historical:
Meridian................. $22.12 $21.01 $21.50 $20.39 $18.75 $17.21 $15.88
UCB...................... 90.27 81.82 84.55 74.02 66.02 60.95 56.85
Pro Forma:
Pro Forma Per Share of
Meridian Common Stock.. 21.47 20.29 20.77 19.52 17.86 16.38 15.08
Equivalent Pro Forma Per
Share of UCB Common
Stock.................. 107.35 101.45 103.85 97.60 89.30 81.90 75.40
Cash Dividends Declared Per
Common Share:
Historical:
Meridian................. .71 .66 1.34 1.26 .90 1.20 1.20
UCB...................... 1.60 1.40 3.285 2.60 2.85 2.20 2.70
Pro Forma:
Pro Forma Per Share of
Meridian Common
Stock(1)............... .71 .66 1.34 1.26 .90 1.20 1.20
Equivalent Pro Forma Per
Share of UCB Common
Stock(1)............... 3.55 3.30 6.70 6.30 4.50 6.00 6.00
Income from Continuing
Operations Per Common
Share(2)
Historical:
Meridian
Primary................ 1.19(4) 1.40 2.80 2.61 2.45 2.36 1.22
Fully Diluted.......... 1.18(4) 1.40 2.80 2.61 2.44 2.35 1.22
UCB
Primary................ 9.02(5) 5.50 11.12 11.29 9.96 6.28 9.23
Fully Diluted.......... 9.02(5) 5.50 11.12 11.29 9.96 6.28 9.23
Pro Forma:
Per Share of Meridian
Common Stock(3)
Primary................ 1.29(6) 1.35 2.70 2.55 2.38 2.17 1.33
Fully Diluted.......... 1.28(6) 1.35 2.70 2.55 2.38 2.16 1.33
Equivalent Pro Forma Per
Share of UCB Common
Stock(3)
Primary................ 6.45(6) 6.75 13.50 12.80 11.90 10.85 6.65
Fully Diluted.......... 6.40(6) 6.75 13.50 12.80 11.90 10.80 6.65
- --------------------
<FN>
(1) Meridian pro forma dividends per share represent historical
dividends paid by Meridian. UCB pro forma equivalent
dividends per share represent such amounts multiplied by
5.00. Based on Meridian's current quarterly dividend of
$.37 per share, equivalent pro forma quarterly cash
dividends per share of UCB Common Stock would be $1.85 per
share as a result of the Merger, an increase of 131.25% from
the $.80 normal quarterly dividend paid by UCB for the
quarter immediately prior to execution of the Merger
Agreement. See "DESCRIPTION OF MERIDIAN -- Market Price of
and Dividends on Meridian Common Stock"; "THE MERGER --
Terms of the Merger -- Management and Operations After the
Merger; Post-Merger Dividend Policy."
(2) The computation of earnings per share does not include the
effect of (i) Meridian Common Stock which may be issued in
connection with Meridian's Floating Rate Subordinated
Capital Notes (the "Notes") or (ii) a repurchase of up to
one million shares of Meridian Common Stock authorized by
Meridian provided such repurchase does not adversely affect
the ability of Meridian to account for the Merger as a
pooling of interests. See "DESCRIPTION OF MERIDIAN CAPITAL
SECURITIES -- Capital Notes."
(3) Meridian pro forma income from continuing operations per
common share represents historical net income from
continuing operations for Meridian and UCB combined on the
assumption that Meridian and UCB had been combined for each
period presented on a pooling of interests basis, divided by
the number of shares of Meridian Common Stock which will be
issued and outstanding after the Merger. UCB equivalent pro
forma income from continuing operations per common share
represents such amounts multiplied by 5.00.
(4) Includes the effects of a restructuring charge of
$32 million ($20.8 million after-tax or $0.37 on both a
primary and fully diluted per share basis) taken by Meridian
in the second quarter of 1995. Excluding the effects of the
Meridian restructuring charge, for the six months ended
June 30, 1995 Meridian's historical primary and fully
diluted income per share from continuing operations would
have been $1.56 and $1.55, respectively. See "Meridian
Selected Historical Financial Data."
(5) Includes a gain by UCB for the first quarter of 1995 on
exchange of securities available for sale of $12.0 million
pre-tax ($7.6 million after-tax, or $3.56 per share of UCB
Common Stock). Excluding such gain, for the six months
ended June 30, 1995 historical income from continuing
operations per share of UCB Common Stock would have been
$5.46 (primary and fully diluted). See "UCB Selected
Historical Financial Data."
(6) Includes the effects of the restructuring charge taken by
Meridian in the second quarter of 1995 and the gain by UCB
on exchange of securities available for sale for the first
quarter of 1995. See footnotes 4 and 5. Excluding the
effects of the Meridian restructuring charge and the UCB
gain on exchange of securities available for sale, for the
six months ended June 30, 1995, pro forma income from
continuing operations per share of Meridian Common Stock
would have been $1.48 (primary and fully diluted) and
equivalent pro forma income from continuing operations per
share of UCB Common Stock would have been $7.40 (primary and
fully diluted).
</TABLE>
Pro Forma Combined Condensed Financial Data
The following table sets forth certain unaudited pro
forma information which combines certain selected historical
unaudited (i) consolidated balance sheet information of Meridian
and UCB on the assumption that the Merger was completed on
June 30, 1995 in a transaction accounted for as a pooling of
interests, and (ii) consolidated earnings data on the assumption
that Meridian and UCB had been combined for each period
presented, on a pooling of interests basis.
<TABLE>
<CAPTION>
At or for the
Six Months
Ended June 30, At or for the Year Ended December 31,
------------------- ----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings Data (in
millions)
Net Income from
Continuing
Operations...... $86.5(1) $93.0 $185.9 $174.7 $158.3 $137.9 $83.3
Per Share Data
Net Income from
Continuing
Operations
(Fully
Diluted)...... 1.28(1) 1.35 2.70 2.55 2.38 2.16 1.33
Book Value...... 21.47 20.29 20.77 19.52 17.86 16.38 15.08
Balance Sheet Data
(in millions)
Loans........... 10,435.1 9,889.4 10,137.9 9,385.8 8,968.7 8,955.2 9,870.7
Assets.......... 16,527.7 16,846.1 16,733.5 15,771.3 15,925.2 14,747.6 14,757.0
Deposits........ 12,840.2 13,058.1 12,734.3 12,739.0 13,147.2 12,283.7 11,695.8
Shareholders'
Equity........ 1,429.6 1,389.5 1,396.7 1,343.6 1,201.4 1,080.6 943.0
_______________
<FN>
(1) Includes the effects of (i) a restructuring charge of
$32 million ($20.8 million after tax, or $0.37 per share on
both a primary and fully diluted per share basis) taken by
Meridian in the second quarter of 1995 and (ii) a gain by
UCB for the first quarter of 1995 on exchange of securities
available for sale of $12.0 million pre-tax ($7.6 million
after-tax, or $3.56 per share of UCB Common Stock).
Excluding such effects, for the six-month period ended
June 30, 1995 pro forma net income from continuing
operations would have been $99.7 million and pro forma net
income per share on a fully diluted basis would have been
$1.48. See "Meridian Selected Historical Financial Data,"
"UCB Selected Historical Financial Data" and "Selected Pro
Forma Combined Financial Information."
</TABLE>
The information set forth above is not necessarily
indicative of the results of operations or combined financial
position which would have resulted had the Merger been completed
at the beginning of the periods indicated, nor is it necessarily
indicative of the results of operations of future periods or
future combined financial position. See "RECENT DEVELOPMENTS"
and "SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION."
Market Value of Securities
The following table sets forth the market value per
share of Meridian Common Stock and UCB Common Stock and the
equivalent market value per share of UCB Common Stock on May 23,
1995, the last business day preceding public announcement of the
Merger. The equivalent market value per share of UCB Common
Stock shown in the table is based upon the fixed Exchange Ratio
of 5.00 shares of Meridian Common Stock for each share of UCB
Common Stock outstanding. The historical market values per share
of Meridian Common Stock and UCB Common Stock and the per share
market value of Meridian Common Stock used to determine the
equivalent market value per share of UCB Common Stock are the
last per share sales price on May 23, 1995, as reported on the
NASDAQ Stock Market with respect to Meridian and on the NASDAQ
Small-Cap Market with respect to UCB. See "THE MERGER -- Terms
of the Merger."
Equivalent
Meridian UCB Market Value
Historical Historical Per Share
---------- ---------- ------------
May 23, 1995........... $33.00 $127.50 $165.00
Market Price and Dividend Information
On September ___, 1995, the last reported sale price of
Meridian Common Stock, as reported on the NASDAQ Stock Market,
was $___________ per share. For information concerning cash and
stock dividends paid by Meridian, see "DESCRIPTION OF MERIDIAN --
Market Price of and Dividends on Meridian Common Stock."
<PAGE>
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to
stockholders of UCB in connection with the solicitation of
proxies by the Board of Directors of UCB for use at the Special
Meeting of Stockholders of UCB (the "Special Meeting") to be held
at the Corporate Headquarters of UCB, Four Commerce Drive,
Cranford, New Jersey 07016, on November 1, 1995, at 10:00 a.m.,
local time, and at any adjournments thereof.
At the Special Meeting, stockholders of UCB will be
asked to approve the Merger Agreement, a copy of which is
attached as Annex A and incorporated by reference and more fully
described herein, and to act on certain other matters referred to
below. Stockholders of UCB will also be asked to approve a
proposal to adjourn the Special Meeting, if necessary, to permit
further solicitation of proxies in the event there are not
sufficient votes at the time of the Special Meeting to constitute
a quorum or to approve the Merger Agreement. The description of
the Merger Agreement set forth herein is qualified in its
entirety by reference to the Merger Agreement, a copy of which is
attached hereto as Annex A.
The approximate date on which this Proxy
Statement/Prospectus is first being sent to stockholders of UCB
is September ___, 1995.
<PAGE>
DESCRIPTION OF MERIDIAN
General
Meridian
Meridian is a Pennsylvania multi-bank holding company
headquartered in Reading, Pennsylvania. At June 30, 1995,
Meridian and its subsidiaries had total consolidated assets,
deposits, and shareholders' equity of approximately
$14.9 billion, $11.5 billion and $1.24 billion, respectively, and
in terms of both assets and deposits, Meridian was the fourth
largest bank holding company headquartered in Pennsylvania.
The principal executive offices of Meridian are located
at 35 North Sixth Street, Reading, Pennsylvania 19601, and its
telephone number is (610) 655-2000.
Meridian is a legal entity separate and distinct from
its subsidiary banks and direct and indirect nonbanking
subsidiaries. Accordingly, the right of Meridian, and
consequently the right of creditors and shareholders of Meridian,
to participate in any distribution of the assets or earnings of
any affiliated bank is necessarily subject to the prior claims of
creditors of the affiliated bank, except to the extent that
claims of Meridian in its capacity as a creditor may be
recognized. The principal source of Meridian's revenue and cash
flow is dividends from its affiliated banks and other
subsidiaries.
Banking
Meridian's banking subsidiaries consist of Meridian
Bank (with total assets, deposits and shareholders' equity of
$12.7 billion, $9.9 billion and $1.0 billion, respectively, at
June 30, 1995), Delaware Trust Company (with total assets,
deposits and stockholders' equity of $1.43 billion, $1.15 billion
and $148.4 million, respectively, at June 30, 1995), and MBNJ
(with total assets, deposits and stockholders' equity of
$652.4 million, $553.0 million and $81.3 million, respectively,
at June 30, 1995). As of June 30, 1995, Meridian's banking
subsidiaries operated more than 300 branches in eastern
Pennsylvania, southern New Jersey and the State of Delaware.
Financial Services
Meridian's financial services subsidiaries offer asset
management and securities services. Meridian Asset Management,
Inc., a subsidiary of Meridian, and Delaware Trust Capital
Management, Inc., a subsidiary of Delaware Trust Company, provide
corporate trust, asset management, fiduciary and related
services, as well as investment advisory services. Meridian
Capital Markets, Inc., a division of Meridian Bank, securitizes
assets, buys and sells, as principal and agent, mortgages,
mortgage related product, securities and loan servicing and
interest rate products, underwrites municipal obligations and
mortgage-backed securities, and engages in various related
activities.
Other
Meridian regularly explores opportunities for possible
acquisitions of financial institutions and related businesses.
At the date hereof, Meridian has not entered into any
agreements or understandings with respect to any significant
acquisitions or similar transactions, except for the Merger and
except as described in this Proxy Statement/Prospectus and/or in
documents incorporated herein by reference. See "INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE," "AVAILABLE INFORMATION" and
"SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION."
For additional information concerning Meridian, its
business, financial condition and results of operations,
reference should be made to the Meridian documents incorporated
herein by reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE," "AVAILABLE INFORMATION" and "SELECTED PRO FORMA
COMBINED FINANCIAL INFORMATION."
Market Price of and Dividends on Meridian Common Stock
The Meridian Common Stock is traded in the
over-the-counter market and is quoted on the NASDAQ Stock Market
(formerly the NASDAQ National Market System), under the symbol
MRDN. As of September __, 1995, there were approximately
________ Meridian shareholders of record, which does not include
the number of persons or entities whose stock is held in street
name through various brokerage firms or banks.
The table below sets forth the quarterly ranges of high
and low bid prices for Meridian Common Stock as reported by the
NASDAQ Stock Market and does not necessarily reflect mark-ups,
mark-downs or commissions. The table also reflects dividends
paid during the periods indicated.
Quarterly
Quarter Ended Dividend High Low
- -----------------------------------------------------------------
September 30, 1995(1)..... $.37 $ $
June 30, 1995............. .37 34-3/8 30-5/8
March 31, 1995............ .34 31-1/4 26-1/4
December 31, 1994......... .34 29-1/4 25-1/2
September 30, 1994........ .34 33-1/8 28-3/4
June 30, 1994............. .34 33-1/4 27-3/8
March 31, 1994............ .32 31-1/8 26-7/8
December 31, 1993......... .32 33-1/8 27-3/4
September 30, 1993........ .32 34-5/8 30-1/4
June 30, 1993............. .32 34 26-3/4
March 31, 1993............ .30 35-3/4 29-3/4
______________________
(1) Through September __, 1995
On May 23, 1995, the last business day preceding public
announcement of the Merger, the last sale price for Meridian
Common Stock was $33.00 per share. On September __, 1995, the
last sale price for Meridian Common Stock was $__________ per
share.
For the six-month period ended June 30, 1995, the
average daily trading volume in shares of Meridian Common Stock
was approximately 190,000. For the period from July 1, 1995 to
September ___, 1995, the average daily trading volume was
approximately ____________.
For certain limitations on the ability of Meridian Bank
to pay dividends to Meridian, see Note 7 to Notes to Consolidated
Financial Statements set forth in Meridian's Annual Report on
Form 10-K for the year ended December 31, 1994, which is
incorporated herein by reference. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
Repurchase of Meridian Common Stock
Meridian has authorized a repurchase of up to one
million shares of Meridian Common Stock, provided such repurchase
does not adversely affect the ability of Meridian to account for
the Merger as a pooling of interests.
DESCRIPTION OF UCB
General
UCB
UCB is a New Jersey business corporation and a bank
holding company registered with the Board of Governors of the
Federal Reserve System (the "Federal Reserve"). UCB was
organized in 1983, and commenced operations upon consummation of
the acquisition of all of the outstanding stock of UCTC on
October 1, 1983. At June 30, 1995, UCB had total consolidated
assets, deposits and shareholders' equity of approximately
$1.6 billion, $1.3 billion and $193.5 million, respectively.
The principal executive offices of UCB are located at
Four Commerce Drive, Cranford, New Jersey 07016, and its
telephone number is (908) 931-6600.
For additional information concerning UCB, its
business, financial condition, and results of operations, see
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
UCTC
UCTC is a full-service commercial bank serving central
New Jersey. UCTC's deposits are insured to applicable limits by
the Bank Insurance Fund of the FDIC.
UCTC is headquartered at Four Commerce Drive, Cranford,
Union County, New Jersey 07016. At June 30, 1995, UCTC had
35 branch banking offices in five central New Jersey counties --
Middlesex, Monmouth, Morris, Somerset and Union counties. In
addition, twenty-four-hour banking services are provided through
28 automatic teller machines ("ATMs") located throughout its
service area. UCTC operates its proprietary United ATM System
network.
Retail and commercial banking services offered to
individuals and businesses in UCTC's service area include all
types of deposit accounts, business loans, personal loans,
commercial and residential mortgages, education loans, safe
deposit and night depository services, and personal and corporate
trust services. UCTC does not obtain any material portion of its
deposits from a single individual, one particular business or
from local, state or federal governments. UCTC loans are not
concentrated within a single industry, group of related
industries, or any individual customer. However, the majority of
its lending activity, as well as its deposits, are concentrated
in central New Jersey.
UCTC's Trust Division provides a wide variety of
personal trust services including the administration of trusts
and estates and pension, profit-sharing, and other employee
benefit plans and the provision of investment advisory services.
The Trust Division also acts as corporate trustee, securities
transfer agent, registrar and fiscal and paying agent, and also
acts in other corporate agency capacities. Trust assets under
management by UCTC exceeded $200 million at June 30, 1995.
Market Price of and Dividends on UCB Common Stock and Related
Stockholder Matters
The UCB Common Stock is traded in the over-the-counter
market, under the symbol UCTC. As of June 30, 1995, there were
1,080 stockholders of record, not including the number of persons
or entities whose stock is held in street name through various
brokerage firms or banks.
The table below sets forth the quarterly ranges of high
and low sales prices for the periods indicated, as reported by
the NASDAQ Small-Cap Market. Such quotations reflect interdealer
prices without retail mark-ups, mark-downs or commissions and may
not necessarily represent actual transactions. The table also
shows cash dividends paid during the periods indicated.
Quarterly
Quarter Ended Dividend High Low
- -----------------------------------------------------------------
September 30, 1995(1).... $ $ $
June 30, 1995............ .80 162 150
March 31, 1995........... .80 127-1/2 110
December 31, 1994(2)..... 1.785 143 100
September 30, 1994....... .80 154-1/4 98
June 30, 1994............ .70 100-1/2 95-1/2
March 31, 1994........... .70 98 95
December 31, 1993........ .70 98 95-1/2
September 30, 1993....... .60 95-1/2 85
June 30, 1993............ .60 89 85
March 31, 1993........... .60 89 75-1/2
- --------------------
(1) Through September __, 1995.
(2) In December 1994, UCB paid a dividend of $.985 per share in
addition to its regular quarterly dividend of $.80 per
share.
On May 23, 1995, the last business day preceding public
announcement of the Merger, the last sale price for UCB Common
Stock was $127.50 per share. On September __, 1995, the last
sale price for UCB Common Stock was $__________ per share.
For the six-month period ended June 30, 1995, the
average daily trading volume in shares of UCB Common Stock was
approximately 2,400.
UCB, through the Effective Date of the Merger, is
restricted in the payment of dividends by the terms of the Merger
Agreement. See "THE MERGER -- Dividends." See also Note 11 of
the Notes to Consolidated Financial Statements set forth in UCB's
1994 Annual Report to Shareholders, which financial statements
are incorporated herein by reference to UCB's Annual Report on
Form 10-K for the year ended December 31, 1994. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
<PAGE>
MERIDIAN SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth certain selected
historical consolidated summary financial data for Meridian.
This data is derived from, and should be read in conjunction
with, the consolidated financial statements of Meridian,
including the notes thereto, incorporated by reference in this
Proxy Statement/Prospectus. See "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE" and "AVAILABLE INFORMATION." The data
for the years ended December 31, 1994 through December 31, 1990
are derived from Meridian's consolidated financial statements,
which have been audited. Interim unaudited data for the six
months ended June 30, 1995 and 1994 reflect, in the opinion of
management of Meridian, all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of such
data. During the second quarter, 1995, Meridian recorded a
restructuring charge of $32.0 million ($20.8 million after tax).
The restructuring charge related to the implementation of a
program intended to reduce Meridian's performance ratio
(non-interest expense as a percentage of income) from its current
level to 59.9% or lower by the end of the first quarter of 1996.
The following historical financial data at and for the six month
period ended June 30, 1995 reflect this restructuring charge.
Results for the six months ended June 30, 1995 are not
necessarily indicative of results which may be expected for any
other interim period or for the year as a whole.
<PAGE>
MERIDIAN SELECTED HISTORICAL FINANCIAL DATA
<TABLE>
<CAPTION>
(Dollars in Thousands, Except Per Share Data)
At or for the Six Months
Ended June 30, At or for the Year Ended December 31, -
1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS
FOR THE YEAR
Interest Income......... $ 556,176 $ 463,709 $ 985,040 $ 961,690 $ 1,016,181(/2/) $ 1,123,711 $1,246,867
Interest Expense........ 252,412 160,937 372,624 344,398 442,998 623,675 775,495
Net Interest Income..... 303,764 302,772 612,416 617,292 573,183 500,036 471,372
Provision for Possible
Loan Losses............ 18,142 15,524 28,086 58,781 81,096 108,990 141,326
Net Interest Income
After Provision for
Possible Loan Losses... 285,622 287,248 584,330 558,511 492,087 391,046 330,046
Non-Interest Income..... 124,866 113,271 228,026 274,623 233,613 253,689 180,420
Non-Interest Expenses:
Restructuring Charge.. 32,000 -- -- -- -- -- --
All other Expenses.... 280,941 281,880 579,668 623,526 540,316 476,676 423,993
Total Non-Interest
Expense............... 312,941 281,880 579,668 623,526 540,316 476,676 423,993
Income from Continuing
Operations Before
Income Taxes and
Cumulative Effect of
Changes in Accounting
Principles............. 97,547 118,639 232,688 209,608 185,384 168,059 86,473
Provision for Income
Taxes.................. 30,383 37,316 70,600 59,068 48,679 43,873 23,806
Income from Continuing
Operations Before
Cumulative Effect of
Changes in Accounting
Principles............. 67,164 81,323 162,088 150,540 136,705 124,186 62,667
Loss From Discontinued
Operations, Net of
Taxes.................. -- -- -- -- -- (6,500) (25,983)
Income Before Cumulative
Effect of Changes in
Accounting Principles.. 67,164 81,323 162,088 150,540 136,705 117,686 36,684
Cumulative After-Tax
Effect of Changes in
Accounting Principles.. -- (2,730) (2,730) 7,221 -- -- --
Net Income.............. $ 67,164 $ 78,593 $ 159,358 $ 157,761 $ 136,705 $ 117,686 $ 36,684
=========== =========== =========== =========== =========== =========== ==========
Net Interest Margin
(Taxable Equivalent
Basis)................. 4.59% 4.84% 4.73% 4.96% 4.77% 4.47% 4.16%
Return on Average
Assets/(1)/............ .91% 1.12% 1.10% 1.11% 1.00% .96% .47%
Return on Average Assets
Before Restructuring
Charge................. 1.20% -- -- -- -- -- --
Return on Average Common
Shareholders'
Equity/(1)/............ 11.11% 13.37% 13.26% 14.17% 13.63% 14.31% 7.46%
Return on Average Common
Shareholders' Equity
Before Restructuring
Charge.................. 14.55% -- -- -- -- -- --
Fully Diluted Earnings
Per Share:
Income from Continuing
Operations Before
Cumulative Effect of
Changes in Accounting
Principles............. $ 1.18 $ 1.40 $ 2.80 $ 2.61 $ 2.44 $ 2.35 $ 1.22
Loss from Discontinued
Operations, Net of
Taxes................. -- -- -- -- -- (.12) (.51)
Income Before
Cumulative Effect of
Changes in Accounting
Principles............ 1.18 1.40 2.80 2.61 2.44 2.23 .71
Cumulative After-Tax
Effect of Changes in
Accounting Principles. -- (.05) (.05) .13 -- -- --
Net Income............. 1.18 1.35 2.75 2.74 2.44 2.23 .71
Net Income Before
Restructuring Charge 1.55 -- -- -- -- -- --
Dividends Declared Per
Common Share........... .71 0.66 1.34 1.26 .90(/2/) 1.20 1.20
Dividends Paid Per
Common Share........... .71 0.66 1.34 1.26 1.20 1.20 1.20
Ratio of Dividends
Declared to Net Income. 59% 48% 49% 43% 35% 48% 149%
FINANCIAL CONDITION AT
PERIOD-END
Securities.............. $ 3,034,086 $ 3,349,579 $ 3,307,413 $ 3,060,147 $ 3,405,727 $ 2,853,581 $ 2,153,977
Loans................... 10,056,692 9,520,497 9,757,623 8,988,044 8,551,597 8,498,050 9,440,894
Assets.................. 14,911,173 15,184,724 15,052,647 14,084,787 14,290,325 13,205,391 13,444,753
Deposits................ 11,528,876 11,666,783 11,379,567 11,346,151 11,774,702 10,948,133 10,573,972
Total Shareholders'
Equity................. 1,236,161 1,214,604 1,215,085 1,185,633 1,059,319 947,733 817,413
Book Value Per Common
Share.................. 22.12 21.01 21.50 20.39 18.75 17.21 15.88
Common Shares
Outstanding............ 55,886,536 57,802,722 56,506,642 58,154,486 56,491,396 55,064,521 51,475,965
Total Shareholders'
Equity to Assets....... 8.29% 8.00% 8.07% 8.42% 7.41% 7.18% 6.08%
Risk-Based Capital
Ratio (Unaudited)...... 12.76% 13.30% 12.73% 13.67% 11.61% 10.37% 8.23%
Allowance for Possible
Loan Losses............ $ 170,684 $ 172,343 169,402 173,388 165,512 179,167 157,505
Allowance for Possible
Loan Losses to Loans... 1.70% 1.81% 1.74% 1.94% 1.94% 2.10% 1.67%
Allowance for Possible
Loan Losses to Non-
Performing Loans....... 171% 151% 176% 117% 90% 80% 103%
Non-Performing Assets as
Percentage of Loans and
Assets Acquired in
Foreclosures........... 1.17% 1.50% 1.24% 2.00% 2.50% 2.88% 1.96%
Non-Performing Assets
and Loans Past Due 90
or more Days as to
Interest or Principal
as a Percentage of
Loans and Assets
Acquired in
Foreclosures........... 1.39% 1.87% 1.47% 2.27% 2.98% 3.52% 2.56%
<FN>
/(1)/ Calculation is based upon continuing operations.
/(2)/ Reflects new dividend payment schedule adopted in the first quarter
of 1992.
</TABLE>
<PAGE>
UCB SELECTED HISTORICAL FINANCIAL DATA
The following table sets forth certain selected
historical consolidated financial data for UCB. This data is
derived from, and should be read in conjunction with, the
consolidated financial statements of UCB, including the notes
thereto, incorporated by reference into this Proxy
Statement/Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE" and "AVAILABLE INFORMATION." The data for the years
ended December 31, 1994 through December 31, 1990 are derived
from UCB's consolidated financial statements, which have been
audited. Interim unaudited data for the six months ended
June 30, 1995 and 1994 reflect, in the opinion of the management
of UCB, all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of such data.
Results for the six months ended June 30, 1995 are not
necessarily indicative of results which may be expected for any
other interim period or for the year as a whole.
<PAGE>
UCB SELECTED HISTORICAL FINANCIAL DATA
<TABLE>
<CAPTION>
(Dollars in Thousands, Except Per Share Data)
At or for the Six Months
Ended June 30, At or for the Year Ended December 31,
1995 1994 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Statistics:
Total assets $1,616,517 $1,661,348 $1,680,940 $1,686,513 $1,634,908 $1,542,170 $1,312,161
Total deposits 1,311,301 1,391,274 1,354,738 1,392,837 1,372,463 1,335,641 1,121,793
Total loans, net
of unearned
discounts 378,369 368,899 374,375 375,645 376,343 401,766 407,798
Securities available-
for-sale 105,048 110,748 100,070 - - - -
Investment securities 953,832 970,751 965,239 1,083,017 1,035,843 948,147 656,186
Allowance for loan
losses 10,790 11,016 11,091 11,014 10,930 9,722 7,772
Stockholders' equity 193,470 174,857 181,583 157,968 142,139 132,867 125,635
Average Balances:
Total assets 1,594,307 1,632,544 1,630,289 1,589,090 1,534,287 1,394,828 1,249,194
Stockholders' equity 187,883 165,333 171,444 150,627 134,586 127,937 117,548
Summary of Operations:
Interest income 51,872 49,576 100,810 101,972 108,053 107,216 106,037
Interest expense 20,199 16,327 34,580 33,399 45,498 59,009 58,271
Net interest income 31,673 33,249 66,230 68,573 62,555 48,207 47,766
Provision for loan losses (500) (625) (825) 175 1,527 2,875 1,019
Net interest income after
provision for loan losses 32,173 33,874 67,055 68,398 61,028 45,332 46,747
Other operating income 14,760(1) 3,661 7,108 8,408 9,774 9,654 10,785
Gain on sale of MasterCard/
Visa receivables - - - - - - 8,442
Other operating expense 18,051 19,849 39,333 40,946 38,953 36,254 38,238
Income before income taxes
and cumulative effect of
change in accounting
principles 28,882(1) 17,686 34,830 35,860 31,849 18,732 27,736
Income taxes 9,532 5,948 11,038 11,667 10,256 4,976 7,123
Income before cumulative
effect of change in
accounting principles 19,350(1) 11,738 23,792 24,193 21,593 13,756 20,613
Cumulative effect of
change in accounting
principles - - - (579) (4,031) - -
Net income $ 19,350(1) $ 11,738 $ 23,792 $ 23,614 $ 17,562 $ 13,756 $ 20,613
========== ========== ========== ========== ========== ========== ==========
Dividends:
Cash dividends paid $3,432 $2,990 $8,537 $5,358 $4,881 $4,825 $6,028
Payout ratio 18% 25% 36% 23% 28% 35% 29%
Per Share:
Income before cumulative
effect of change in
accounting principles $ 9.02(1) $ 5.50 $11.12 $11.29 $ 9.96 $ 6.28 $ 9.23
Cumulative effect of
change in accounting
principles - - - (.27) (1.86) - -
Net income $ 9.02(1) $ 5.50 $11.12 $11.02 $ 8.10 $ 6.28 $ 9.23
====== ====== ====== ====== ====== ====== ======
Cash dividends paid $ 1.60 $ 1.40 $3.985 $ 2.50 $ 2.25 $ 2.20 $ 2.70
Book value (period-end) 90.27 81.82 84.55 74.02 66.02 60.95 56.85
Outstanding shares:
Average during period 2,145 2,135 2,139 2,142 2,167 2,191 2,232
Period-end 2,143 2,137 2,148 2,134 2,153 2,180 2,210
Operating ratios:
Return on average assets 1.95%(1) 1.44% 1.46% 1.49% 1.14% 0.99% 1.65%
Return on average stock-
holders' equity 16.54 (1) 14.20 13.88 15.68 13.05 10.75 17.54
Average stockholders'
equity to average
assets 11.78 10.13 10.52 9.48 8.77 9.17 9.41
Regulatory Capital Ratios
(Unaudited):
Leverage 12.0% 10.3% 10.8% 9.7% 9.0% 9.5% 10.1%
Tier 1 37.5 35.0 35.8 33.3 30.6 25.8 21.3
Tier 2 38.8 36.2 37.0 34.6 31.9 27.3 22.6
__________________
<FN>
(1) Includes gain on exchange of securities available for sale of $12.0
million pre-tax ($7.6 million after tax, or $3.56 per share).
</TABLE>
<PAGE>
SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION
The following tables set forth selected unaudited pro
forma financial data reflecting the Merger (accounted for using
the pooling of interests method of accounting). The pro forma
financial information does not necessarily reflect what the
actual results of Meridian would be following completion of the
Merger.
The pro forma information has been prepared based upon
a fixed exchange ratio of 5.00 shares of Meridian Common Stock
for each share of UCB Common Stock outstanding. See "THE
MERGER -- Terms of the Merger." The pro forma information also
has been prepared assuming that options to purchase 47,601 shares
of UCB Common Stock are converted into 238,005 shares of Meridian
Common Stock as required by the Merger Agreement.
During the second quarter, 1995, Meridian recorded a
restructuring charge of $32.0 million ($20.8 million after tax).
The restructuring charge related to the implementation of a
program intended to reduce Meridian's performance ratio
(non-interest expense as a percentage of income) from its current
level to 59.9% or lower by the end of the first quarter of 1996.
The restructuring charge is reflected in the Meridian historical
and the pro forma Meridian and UCB combined data at and for the
period ended June 30, 1995. Meridian also expects to realize
certain revenue enhancements and to achieve certain cost savings
through the consolidation of certain back office and support
functions and through elimination of redundant costs after the
Merger. Meridian also expects to realize certain revenue
enhancements following the Merger as a result of the expansion of
products and services and increased lending activities. No
assurance can be given that any such cost savings or revenue
enhancements will be realized. The pro forma information does
not reflect any of these anticipated cost savings or revenue
enhancements. See "THE MERGER -- Management and Operations After
the Merger."
<PAGE>
Pro Forma Condensed Consolidated Balance Sheet As of June 30,
1995
The following unaudited pro forma combined condensed
balance sheet information combines the historical consolidated
balance sheets of Meridian and UCB as of June 30, 1995. The
Merger has been reflected as a pooling of interests. Such pro
forma financial information does not necessarily reflect what the
actual results of Meridian would be following completion of the
Merger. This pro forma information should be read in conjunction
with the historical consolidated financial statements of Meridian
and UCB, including the notes thereto, incorporated by reference
in this Proxy Statement/Prospectus. See "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE."
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED BALANCE SHEET
AS OF JUNE 30, 1995
(Dollars in Thousands)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
----------- ---------- ------------
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks....................................... $ 643,237 $ 72,118 $ 715,355
Short-Term Investments........................................ 78,813 68,546 147,359
Trading Account Assets........................................ 247,867 - 247,867
Investment Securities and Investment Securities
Available for Sale.......................................... 3,034,086 1,058,880 4,092,966
Loans and Other Assets Held for Sale.......................... 108,043 - 108,043
Total Loans................................................... 10,056,692 378,369 10,435,061
Allowance for Possible Loan Losses............................ (170,684) (10,790) (181,474)
Other Assets.................................................. 913,119 49,394 962,513
-------------- -------------- --------------
TOTAL ASSETS.................................................. $14,911,173 $1,616,517 $16,527,690
============== ============== ==============
LIABILITIES
Total Deposits................................................ $11,528,876 $1,311,301 $12,840,177
Short-Term Borrowings......................................... 1,330,594 79,389 1,409,983
Long-Term Debt and Other Borrowings........................... 512,182 11,176 523,358
Other Liabilities............................................. 303,360 21,181 324,541
-------------- -------------- --------------
TOTAL LIABILITIES............................................. 13,675,012 1,423,047 15,098,059
-------------- -------------- --------------
Common Stock.................................................. 291,683 2,525 345,264
Surplus....................................................... 211,292 23,984 161,988
Retained Earnings............................................. 797,382 185,885 983,267
Net Unrealized Gains (Losses) on Securities................... 6,096 3,308 9,404
Treasury Stock................................................ (15,214) (22,232) (15,214)
Unallocated Shares Held by Employees Stock Ownership Plan
(ESOP) Trust................................................ (55,078) - (55,078)
-------------- -------------- --------------
TOTAL SHAREHOLDERS' EQUITY.................................... 1,236,161 193,470 1,429,631
-------------- -------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.................... $14,911,173 $1,616,517 $16,527,690
============== ============== ==============
</TABLE>
Note: Reclassifications have been made between Common Stock, Surplus
and Treasury Stock to reflect pooling-of-interests financial accounting
treatment for the transaction.
<PAGE>
Pro Forma Condensed Consolidated Statements of Income
for the Six Months Ended June 30, 1995 and June 30, 1994
and the Years Ended December 31, 1994, 1993 and 1992
The following unaudited pro forma condensed consolidated
statements of income for the six-month periods ended June 30, 1995 and
1994 give effect to the Merger as if it had occurred on January 1, 1995
and 1994, respectively. The pro forma information relating to earnings
for the years ended December 31, 1994, 1993, and 1992 gives effect to
the Merger as if it had occurred on January 1, 1994, 1993 and 1992,
respectively. See "THE MERGER -- Accounting Treatment." This pro
forma information should be read in conjunction with the historical
consolidated financial statements of Meridian and UCB, including the
notes thereto, incorporated by reference in this Proxy
Statement/Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR SIX MONTHS ENDED JUNE 30, 1995
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ -------------
<S> <C> <C> <C>
Interest Income........................................ $556,176 $51,872 $608,048
Interest Expense....................................... 252,412 20,199 272,611
------------ ------------ -------------
Net Interest Income.................................... 303,764 31,673 335,437
------------ ------------ -------------
Provision for Possible Loan Losses..................... 18,142 (500) 17,642
Non-Interest Income.................................... 124,866 14,760(2) 139,626
Non-Interest Expenses.................................. 312,941(1) 18,051 330,992
------------ ------------ -------------
Income Before Income Taxes............................. 97,547(1) 28,882(2) 126,429
Provision for Income Taxes............................. 30,383 9,532 39,915
------------ ------------ -------------
Net Income............................................. $67,164(1) $19,350(2) $86,514(3)
============ ============ =============
PER COMMON SHARE
Net Income
Primary.......................................... $1.19(1) $9.02(2) $1.29(3)
Fully Diluted.................................... $1.18(1) $9.02(2) $1.28(3)
________________________
<FN>
(1) Includes the effects of a restructuring charge of $32 million
($20.8 million after-tax or $0.37 on both a primary and fully
diluted per share basis) taken by Meridian in the second quarter
of 1995.
(2) Includes gain on exchange of securities available for sale of
$12 million pre-tax and $7.6 million after-tax gain, which
amounted to $3.56 per share of UCB Common Stock.
(3) Excluding the effects of the Meridian restructuring charge and the
UCB gain on exchange of securities available for sale, pro forma
net income would have been $99.7 million and pro forma per share
net income would have been $1.48 (primary and fully diluted).
/TABLE
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR SIX MONTHS ENDED JUNE 30, 1994
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ ---------------
<S> <C> <C> <C>
Interest Income............................................ $463,709 $49,576 $513,285
Interest Expense........................................... 160,937 16,327 177,264
------------ ------------ ---------------
Net Interest Income........................................ 302,772 33,249 336,021
------------ ------------ ---------------
Provision for Possible Loan Losses......................... 15,524 (625) 14,899
Non-Interest Income........................................ 113,271 3,661 116,932
Non-Interest Expenses...................................... 281,880 19,849 301,729
------------ ------------ ---------------
Income Before Income Taxes and Cumulative
Effect of Change in Accounting Principle................ 118,639 17,686 136,325
Provision for Income Taxes................................. 37,316 5,948 43,264
------------ ------------ ---------------
Income Before Cumulative Effect of Change in Accounting
Principle............................................... 81,323 11,738 93,061
Cumulative After-Tax Effect On Prior Years of Change
in Method of Accounting for Postemployment Benefits...... (2,730) - (2,730)
------------ ------------ ---------------
Net Income................................................. $78,593 $11,738 $90,331
============ ============ ===============
PER COMMON SHARE
Income Before Cumulative Effect of Change
in Accounting Principle
Primary.............................................. $1.40 $5.50 $1.35
Fully Diluted........................................ $1.40 $5.50 $1.35
Cumulative After-Tax Effect on Prior Years of Change
in Accounting Principle
Primary.............................................. ($0.05) - ($0.04)
Fully Diluted........................................ ($0.05) - ($0.04)
Net Income
Primary.............................................. $1.35 $5.50 $1.31
Fully Diluted........................................ $1.35 $5.50 $1.31
/TABLE
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1994
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ ---------------
<S> <C> <C> <C>
Interest Income............................................ $985,040 $100,810 $1,085,850
Interest Expense........................................... 372,624 34,580 407,204
------------ ------------ ---------------
Net Interest Income........................................ 612,416 66,230 678,646
------------ ------------ ---------------
Provision for Possible Loan Losses......................... 28,086 (825) 27,261
Non-Interest Income........................................ 228,026 7,108 235,134
Non-Interest Expenses...................................... 579,668 39,333 619,001
------------ ------------ ---------------
Income Before Income Taxes and Cumulative
Effect of Change in Accounting Principle................ 232,688 34,830 267,518
Provision for Income Taxes................................. 70,600 11,038 81,638
------------ ------------ ---------------
Income Before Cumulative Effect of Change in Accounting
Principle............................................... 162,088 23,792 185,880
Cumulative After-Tax Effect On Prior Years Of Change
in Method of Accounting for Postemployment Benefits ..... (2,730) - (2,730)
------------ ------------ ---------------
Net Income................................................. $159,358 $23,792 $183,150
============ ============ ===============
PER COMMON SHARE
Income Before Cumulative Effect of Change
in Accounting Principle
Primary.............................................. $2.80 $11.12 $2.70
Fully Diluted........................................ $2.80 $11.12 $2.70
Cumulative After-Tax Effect on Prior Years of Change
in Accounting Principle
Primary.............................................. ($0.05) - ($0.04)
Fully Diluted........................................ ($0.05) - ($0.04)
Net Income
Primary.............................................. $2.75 $11.12 $2.66
Fully Diluted........................................ $2.75 $11.12 $2.66
/TABLE
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ ---------------
<S> <C> <C> <C>
Interest Income............................................ $961,690 $101,972 $1,063,662
Interest Expense........................................... 344,398 33,399 377,797
------------ ------------ ---------------
Net Interest Income........................................ 617,292 68,573 685,865
------------ ------------ ---------------
Provision for Possible Loan Losses......................... 58,781 175 58,956
Non-Interest Income........................................ 274,623 8,408 283,031
Non-Interest Expenses...................................... 623,526 40,946 664,472
------------ ------------ ---------------
Income Before Income Taxes and Cumulative
Effect of Change in Accounting Principle................ 209,608 35,860 245,468
Provision for Income Taxes................................. 59,068 11,667 70,735
------------ ------------ ---------------
Income Before Cumulative Effect in Change in Accounting
Principle................................................ 150,540 24,193 174,733
Cumulative After-Tax Effect on Prior Years of Change in
Method of Accounting for Income Taxes.................... 7,221 (579) 6,642
------------ ------------ ---------------
Net Income................................................. $157,761 $23,614 $181,375
============ ============ ===============
PER COMMON SHARE
Income Before Cumulative Effect of Change
in Accounting Principle
Primary.............................................. $2.61 $11.29 $2.55
Fully Diluted........................................ $2.61 $11.29 $2.55
Cumulative After-Tax Effect on Prior Years of Change
in Accounting Principle
Primary.............................................. $0.13 ($0.27) $0.10
Fully Diluted........................................ $0.13 ($0.27) $0.10
Net Income
Primary.............................................. $2.74 $11.02 $2.65
Fully Diluted........................................ $2.74 $11.02 $2.65
/TABLE
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1992
(Dollars In Thousands, Except Per Share Data)
PRO FORMA
MERIDIAN AND
UNITED UNITED
MERIDIAN COUNTIES COUNTIES
------------ ------------ ---------------
<S> <C> <C> <C>
Interest Income............................................ $1,016,181 $108,053 $1,124,234
Interest Expense........................................... 442,998 45,498 488,496
------------ ------------ ---------------
Net Interest Income........................................ 573,183 62,555 635,738
------------ ------------ ---------------
Provision for Possible Loan Losses......................... 81,096 1,527 82,623
Non-Interest Income........................................ 233,613 9,774 243,387
Non-Interest Expenses...................................... 540,316 38,953 579,269
------------ ------------ ---------------
Income Before Income Taxes and Cumulative Effect of
Change in Accounting Principle.......................... 185,384 31,849 217,233
Provision for Income Taxes................................. 48,679 10,256 58,935
------------ ------------ ---------------
Income Before Cumulative Effect of Change in Accounting
Principle............................................... 136,705 21,593 158,298
Cumulative After-Tax Effect on Prior Years of Change in
Method of Accounting for Postretirement Benefits Other
Than Pensions............................................. - (4,031) (4,031)
------------ ------------ ---------------
Net Income................................................. $136,705 $17,562 $154,267
============ ============ ===============
PER COMMON SHARE
Income Before Cumulative Effect of Change
in Accounting Principle
Primary.............................................. $2.45 $9.96 $2.38
Fully Diluted........................................ $2.44 $9.96 $2.38
Cumulative After-Tax Effect on Prior Years of Change
in Accounting Principle
Primary.............................................. - ($1.86) ($0.06)
Fully Diluted........................................ - ($1.86) ($0.06)
Net Income
Primary.............................................. $2.45 $8.10 $2.32
Fully Diluted........................................ $2.44 $8.10 $2.32
</TABLE>
<PAGE>
Pro Forma Consolidated Capitalization as of June 30, 1995
The following unaudited pro forma combined
capitalization table reflects the historical consolidated
capitalization of Meridian as of June 30, 1995 and, as adjusted,
to give effect to the Merger. Also set forth below are certain
pro forma consolidated capital ratios for Meridian at June 30,
1995. The unaudited information should be read in conjunction
with the historical consolidated financial statements of Meridian
and UCB, including the notes thereto, incorporated by reference
in this Proxy Statement/Prospectus. See "INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE."<PAGE>
<TABLE>
<CAPTION>
PRO FORMA CONSOLIDATED CAPITAL RATIOS
AS OF JUNE 30, 1995
PRO FORMA
MERIDIAN AND
UNITED UNITED
Ratio MERIDIAN COUNTIES COUNTIES
-------------------------------------- ------------ ------------ ---------------
<S> <C> <C> <C>
Shareholders' Equity to Assets 8.29% 11.97% 8.65%
Tangible Shareholders' Equity to Assets 7.51% 11.96% 7.95%
Risk-Based Capital:
Tier 1 Ratio 9.31% 37.52% 10.45%
Tier 2 Ratio 3.45% 1.26% 3.37%
------------ ------------ ---------------
Total Risk-Based Capital 12.76% 38.78% 13.82%
Tier 1 Leverage Ratio 7.57% 12.03% 8.00%
/TABLE
<PAGE>
THE SPECIAL MEETING
Matters to be Considered at the Special Meeting
At the Special Meeting, stockholders of UCB will
consider and vote upon the approval and adoption of the Merger
Agreement. In addition to voting on the Merger Agreement,
stockholders of UCB are being asked to approve a proposal to
adjourn the Special Meeting, if necessary, to permit further
solicitation of proxies in the event there are not sufficient
votes at the time of the Special Meeting to constitute a quorum
or to approve the Merger Agreement. Stockholders will also
consider and vote upon such other matters, if any, as may be
properly brought before the Special Meeting.
The directors, certain executive officers and certain
other affiliates of UCB have agreed to be present (in person or
by proxy) at the Special Meeting and to vote all shares of UCB
Common Stock owned by them for approval and adoption of the
Merger Agreement.
The Board of Directors of UCB has unanimously approved
the Merger Agreement and unanimously recommends a vote FOR
approval and adoption of the Merger Agreement.
Votes Required; Quorum
The affirmative vote of at least 66-2/3% of the
outstanding shares of UCB Common Stock entitled to be voted
thereon, provided a quorum (a majority of the shares of UCB
Common Stock outstanding) is present, is required to approve the
Merger Agreement. The affirmative vote of a majority of the
shares of UCB Common Stock present or represented by proxy at the
Special Meeting is required to adjourn the Special Meeting. Each
share of UCB Common Stock is entitled to one vote. Abstentions
and broker nonvotes will be voted for the purpose of establishing
a quorum at the UCB Special Meeting, but will not constitute or
be counted as votes cast for purposes of the Special Meeting. As
a result, abstentions and broker nonvotes will have the practical
effect of negative votes with respect to approval and adoption of
the Merger Agreement and the proposal to adjourn the Special
Meeting, if necessary.
The directors, certain executive officers and certain
other affiliates of UCB have agreed to be present (in person or
by proxy) at the Special Meeting and to vote all shares of UCB
Common Stock which they own for approval and adoption of the
Merger Agreement. At August 29, 1995, such directors, executive
officers and affiliates of UCB owned and had sole voting power
with respect to approximately 438,708 shares of UCB Common Stock,
or approximately 22.5% of the outstanding shares of UCB Common
Stock which are entitled to be voted at the Special Meeting. At
August 29, 1995, such directors, executive officers and
affiliates of UCB had shared voting power with respect to
approximately 205,847 shares of UCB Common Stock, or
approximately 9.6% of the outstanding shares of UCB Common Stock
which are entitled to be voted at the Special Meeting. A copy of
the form of letter agreement executed by affiliates of UCB is
included as Exhibit 1 to the Merger agreement attached hereto as
Annex A.
Voting of Proxies
Shares represented by all properly executed proxies
received in time for the Special Meeting will be voted at the
Special Meeting in the manner specified by the holders thereof.
Proxies which do not contain voting instructions will be voted in
favor of the Merger Agreement and in favor of the proposal to
adjourn the Special Meeting, if necessary.
It is not expected that any matter other than those
referred to herein will be brought before the Special Meeting.
If, however, other matters are properly presented, the persons
named as proxies will vote in accordance with their judgment with
respect to such matters.
Revocability of Proxies
The submission of a proxy on the enclosed UCB form of
proxy does not preclude a stockholder from voting in person. A
stockholder may revoke a proxy at any time prior to its exercise
by filing with the Secretary of UCB a duly executed revocation or
a proxy bearing a later date or by voting in person at the
meeting. Attendance at the Special Meeting will not of itself
constitute revocation of a proxy.
Record Date; Stock Entitled to Vote
Only stockholders of record of UCB at the close of
business on September 15, 1995, will be entitled to receive
notice of the Special Meeting, and only stockholders of record of
UCB Common Stock at that time will be entitled to vote at the
Special Meeting. At September 15, 1995, there were
___________ shares of UCB Common Stock outstanding.
Appraisal Rights
Record holders of UCB Common Stock will not be entitled to
dissenters' or appraisal rights under applicable law in
connection with the Merger.
Solicitation of Proxies
UCB will bear the cost of the solicitation of proxies
from its stockholders, except that Meridian and UCB will share
equally the cost of printing this Proxy Statement/Prospectus. In
addition to solicitations by mail, certain directors and senior
officers of each company may solicit proxies from shareholders of
such company by telephone or telegram or in person. None of such
persons will be specially engaged for such purpose or will
receive any compensation for assisting in the solicitation of
proxies. Arrangements will also be made with brokerage houses
and other custodians, nominees and fiduciaries for the forwarding
of solicitation material to the beneficial owners of stock held
of record by such persons, and Meridian and UCB will reimburse
such custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses in connection therewith.
Under the terms of the Merger Agreement, UCB has agreed
to retain a proxy solicitor for the Special Meeting upon
Meridian's request at Meridian's expense. As of the date of this
Proxy Statement/Prospectus, UCB has not engaged a proxy solicitor
in connection with the Special Meeting.
STOCKHOLDERS OF UCB SHOULD NOT SEND STOCK CERTIFICATES
WITH THEIR PROXY CARDS. AS DESCRIBED BELOW UNDER THE CAPTION
"THE MERGER -- EXCHANGE OF UCB STOCK CERTIFICATES," EACH UCB
STOCKHOLDER WILL BE PROVIDED WITH MATERIALS FOR EXCHANGING SHARES
OF UCB COMMON STOCK AS PROMPTLY AS PRACTICABLE AFTER THE
EFFECTIVE DATE.<PAGE>
THE MERGER
Background of and Reasons for the Merger; Recommendation of the
UCB Board of Directors
Background of the Merger
In recent years, numerous changes have occurred in the
business operations of firms in the financial services industry
and the commercial banking industry as a part thereof. Among
these changes is a shift in the traditional funding of assets,
particularly home mortgage and automobile loans, with money
center banks and non-regulated institutions increasingly
packaging and securitizing these loans for sale into the public
market. UCB management tracked these trends and believes that
they contributed to the steady decline in UCTC's loans
outstanding in these areas. This decline was accentuated by the
divestiture of UCTC's credit card receivables portfolio in
November 1990.
In 1993, after considering these developments, the
existence of regional interstate banking pacts and the impending
prospect of full interstate banking, the Board of Directors of
UCB began to explore strategic alternatives. UCB considered some
of the advantages which might be derived from a business
combination, including greater shareholder liquidity, additional
product offerings, economies of scale and cost efficiencies in
the consolidation of administrative functions.
Goldman Sachs was contacted to assist in this
evaluation process. UCB's engagement of Goldman Sachs was later
formalized in a letter agreement in which Goldman Sachs undertook
to act as UCB's financial advisor in connection with a possible
merger, acquisition or sale of UCB, to provide UCB with financial
advice and to assist with any potential merger or sale, and to
render its opinion as to the fairness of the consideration to be
received by UCB stockholders in any such transaction.
In 1993 and 1994, either directly or through Goldman
Sachs, UCB initiated contacts with several large financial
institutions with presences or interests in the New Jersey
marketplace. Several of these institutions, including Meridian,
indicated an interest in pursuing a transaction and suggested
prices or exchange ratios at which such a transaction might be
accomplished. UCB negotiated extensively with Meridian during
1994. Both before and after receipt of Meridian's final offer,
UCB directly or through its financial advisors sought to increase
the consideration proposed by other potential bidders. In August
1994, the market value of the consideration proposed by Meridian
was the highest value consideration offered by any of the
prospective bidders. These matters were reported to the Board of
Directors of UCB in a series of meetings, culminating in an
August 30, 1994 meeting at which time, after considering the
results of the negotiations and the advice of UCB's financial and
legal advisors, the directors determined that it was in UCB's
interest to enter into a letter of intent with Meridian
reflecting the terms of Meridian's most recent proposal.
On August 30, 1994, a letter of intent (the "Letter of
Intent") was executed by UCB and Meridian. The Letter of Intent
provided for a merger in which each share of UCB Common Stock
would be exchanged for 5.25 shares of Meridian Common Stock.
On the date prior to the signing of the Letter of
Intent, Meridian Common Stock had closed at $33.00 per share.
The Letter of Intent specified, among other items, that the
definitive merger agreement would permit UCB to abandon the
transaction if Meridian's average stock price was less than
$27.00 per share during a period of time prior to the proposed
closing date. After entering into the Letter of Intent UCB
directly or through its financial advisors and consultants
performed due diligence on Meridian and Meridian performed due
diligence on UCB. As UCB and Meridian were attempting to
negotiate a definitive merger agreement, Meridian's stock price
declined below the $27.00 per share "walkaway" price. On
December 9, 1994 Meridian and UCB jointly announced that "as a
result of prevailing equity market conditions and an inability of
the parties to agree on certain terms of the Plan of Merger," the
companies had terminated their Letter of Intent and merger
discussions.
During the first quarter of 1995, Meridian's stock
price rebounded and discussions with Meridian were resumed during
April and May 1995. Meridian insisted that discussions be
subject to reduction of the exchange ratio from 5.25 to
5.0 shares of Meridian Common Stock for each share of UCB Common
Stock and certain other changes. Among the changes was
elimination of UCB's right to terminate the Agreement if
Meridian's stock price fell below a specified level.
The results of these discussions were first reported to
the UCB Board of Directors at a meeting on May 11, 1995.
Immediately thereafter, at the direction of the UCB Board of
Directors, Goldman Sachs resolicited offers from institutions
which had previously expressed interest in a transaction. None
of these other institutions made a formal offer for UCB nor did
any of them express interest at consideration levels as high as
that reflected in Meridian's restructured offer.
Meridian's restructured offer was considered at a
special meeting of the UCB Board of Directors on May 22, 1995.
The terms and conditions proposed by Meridian, the past and
current status of UCB's contacts with Meridian and with other
potential acquirors, and the historical trends and future
prospects for the business of UCB on a stand-alone basis were
reviewed. Representatives of Goldman Sachs presented information
on the Meridian proposal, information on the contacts with other
bidders, and a summary of UCB's strategic options. UCB's legal
counsel presented advice on the terms and conditions contained in
the draft merger agreement, the stock option agreement required
by Meridian, and the duties and responsibilities of the
directors.
After review and consideration of these matters, the
Board of Directors authorized UCB's officers, with the assistance
of UCB's financial and legal advisors, to negotiate the
definitive merger agreement with Meridian, and to present such
agreement to the Board of Directors for consideration.
Negotiation of the definitive agreement took place
immediately thereafter and a special meeting of the UCB Board of
Directors was held on May 23, 1995 to consider and vote upon the
Merger Agreement and Stock Option Agreement. At this meeting,
the issues addressed at the May 22, 1995 meeting were again
discussed. Following discussion, the Board of Directors
unanimously voted to approve the Merger Agreement and the Stock
Option Agreement. In addition, the Board (with Eugene H. Bauer
abstaining) unanimously voted to approve an agreement with
Mr. Bauer supplementary to his employment agreement, providing
for him to resign all positions with UCB and UCTC on the
Effective Date and to serve thereafter as a consultant on a
limited basis to Meridian until December 31, 2000, and making
certain other clarifications and modifications with respect to
Mr. Bauer's status. See "INTERESTS OF CERTAIN PERSONS IN THE
MERGER -- Employment Agreements."
Reasons for the Merger
UCB's Reasons for the Merger. The Board of
Directors of UCB believes that the terms of the Merger are fair
and in the best interests of UCB's stockholders and have
unanimously approved the Merger Agreement. The Board of
Directors of UCB unanimously recommends that UCB stockholders
approve the Merger Agreement.
Although UCB has been consistently profitable and
recognized as a well-managed banking institution, the UCB Board
of Directors believes shareholders of UCB would be better served
by converting their UCB Common Stock into Meridian Common Stock
at the Exchange Ratio of 5.00 shares of Meridian Common Stock for
each share of UCB Common Stock established under the terms of the
Merger Agreement. The UCB Board of Directors believes that by
becoming part of a larger financial institution, UCB will be in a
better position to succeed in an increasingly competitive
environment. In addition, the UCB Board of Directors expects
that the Merger will make available to UCB's customers a broader
range of financial products and services supported by the latest
bank technology in the retail, middle market and business market
segments currently served by UCB. It is also anticipated that
the Merger will provide UCB shareholders with a more liquid
investment than continued ownership of UCB Common Stock due to
the greater number of Meridian shareholders and the higher
trading volumes of Meridian stock on the NASDAQ National Market
System. In approving the Merger, the UCB Board of Directors did
not specifically identify any one factor or group of factors as
being more significant than any other factor in the decision
making process, although individual directors may have given one
or more factors more weight than other factors.
Meridian's Reasons for the Merger. Meridian's
acquisition strategy consists of identifying financial
institutions with business philosophies which are similar to
Meridian's, which operate in markets which are geographically
within or contiguous to those of Meridian, and which provide an
ability to enhance earnings per share over an acceptable period
after the acquisition, the goal for which is eighteen months,
while providing acceptable rates of return. Acquisitions are
also evaluated in terms of asset quality, interest rate risk,
core deposit base stability, potential operating efficiencies and
management abilities. Meridian has undertaken the Merger as part
of its ongoing acquisition strategy.
In the view of Meridian's Board of Directors, the
Merger constitutes an acquisition which is in line with
Meridian's strategy and provides a natural complement to its
existing franchise. Upon completion of the Merger, Meridian will
have a network in excess of 350 branch banking offices throughout
eastern Pennsylvania, Delaware and New Jersey (see Map on
page ___), and Meridian's New Jersey franchise area will increase
from 24 to 59 branch banking offices. The Board believes that
this enhanced branching network will increase the franchise value
of Meridian, particularly in the New Jersey market, and, thus,
enhance shareholder value.
In addition to the perception that the Merger will
enhance Meridian's franchise, in determining to make the offer to
acquire UCB and enter into the Merger Agreement, Meridian's Board
of Directors also considered a number of other material factors
at the meetings held on June 16, 1994, October 25, 1994 and
May 23, 1995, including the following: (i) the historical
financial condition, operating results, capital levels, asset
quality, UCB and their projected future value and prospects as
separate entities and on a combined basis; (ii) a presentation by
management regarding its due diligence review of UCB; (iii) pro
forma financial information on the Merger, including, among other
things, earnings per share, dilution analysis and ratio impact
information and the effects of the fixed Exchange Ratio thereon;
(iv) the sustainability of core earnings and potentials for
revenue growth; (v) a comparison of the price Meridian proposed
to offer in the Merger to other comparable bank holding company
mergers, based, among other things, on multiples of book value
and earnings per share; (vi) the tax-free nature of the
transaction to Meridian (see, generally, "Certain Federal Income
Tax Consequences" below); (vii) historical stock price
information for both Meridian and UCB, (viii) the effect of the
Merger on trading prices for Meridian Common Stock;
(ix) industry, regulatory, economic and market conditions;
(x) the ability of Meridian to compete in the geographic markets
served by UCB; (xi) the demographics of the markets served by
UCB, and opportunities for product expansion in those markets;
(xii) UCB's agreement, at Meridian's insistence, to grant
Meridian an option to acquire 375,000 shares of UCB's Common
Stock under certain circumstances; (xiii) Meridian's ability to
obtain an opinion from Lehman Brothers, Inc. as to the fairness
of the Exchange Ratio to Meridian; (xiv) a review by management
and legal counsel of the terms of the Merger Agreement and the
Stock Option Agreement; and (xv) the terms of the Merger
Agreement compared to the proposed terms of the transaction upon
expiration of the letter of intent in December 1994.
In approving the transaction, the Board did not
specifically identify any one factor or group of factors as being
more significant than any other factor in the decision making
process, although individual directors may have given one or more
factors more weight than other factors.
The emphasis of the Board's discussions in
considering the transaction, however, was on the financial
aspects of the transaction, particularly (i) the strategic fit
and enhanced franchise value discussed above, (ii) the fixed
Exchange Ratio and the ability of Meridian, by reason thereof, to
fix the number of shares issued in connection with the Merger and
thus the relative amount of earnings per share dilution/accretion
(see "SUMMARY -- Comparative Per Share Data"), (iii) Meridian's
ability to recover such initial dilution through cost savings and
certain revenue enhancements (see "Management and Operations
After the Merger -- Consolidation of Operations: Projected Cost
Savings and Revenue Enhancements" below), (iv) the relative
strength of UCB's balance sheet, including its liquidity position
and capital ratios, (see "UCB SELECTED HISTORICAL CONSOLIDATED
FINANCIAL DATA"), (v) the relative strength of the combined
Meridian and UCB consolidated pro forma balance sheet and capital
ratios (see "SELECTED PRO FORMA COMBINED FINANCIAL INFORMATION"),
(vi) the perception of opportunities for increased fee income
from product expansion and opportunities for retail loan growth,
and (vii) Meridian's ability to obtain an opinion as to the
fairness of the Exchange Ratio to Meridian (see "THE MERGER --
Opinions of Financial Advisors").
In considering the ability of Meridian to recover
any earnings per share dilution by reducing non-interest expenses
or increasing revenues, the Board recognized that, because of the
uncertainties associated with merging two institutions located in
contiguous markets, no assurances could be given that (i) any
particular level of cost savings or improvements to earnings, in
fact, would be realized, (ii) such savings or improvements to
earnings would be realized at the times currently anticipated, or
(iii) such savings or improvements to earnings would not be
offset by increases in other expenses, including expenses
resulting from integrating the two companies. (See "Management
and Operations After the Merger -- Consolidation of Operations;
Projected Cost Savings").
Terms of the Merger
General
Upon completion of the Merger, the separate
existence of UCB will cease. All property, rights, powers,
duties, obligations and liabilities of UCB will automatically be
transferred to Meridian, in accordance with Pennsylvania law.
Meridian, as the surviving corporation, will be governed by the
Articles of Incorporation and Bylaws of Meridian in effect
immediately prior to completion of the Merger. See "COMPARISON
OF SHAREHOLDER RIGHTS."
Exchange Ratio
Upon completion of the Merger, each outstanding
share of Meridian Common Stock will continue to be outstanding as
an identical share of Meridian Common Stock. Under the Merger
Agreement, each outstanding share of UCB Common Stock will be
converted automatically into and become a right to receive
5.00 shares of Meridian Common Stock (including associated stock
purchase rights). UCB shareholders will receive cash in lieu of
any fractional shares of Meridian Common Stock which may become
issuable under the Merger Agreement. See "Exchange of UCB Stock
Certificates" herein.
If Meridian, at any time before completion of the
Merger, pays or effects a stock dividend, stock split, reverse
stock split or reclassification of the Meridian Common Stock,
then the Exchange Ratio will be adjusted so that each UCB
shareholder will be entitled to receive such number of shares of
Meridian Common Stock as he would have been entitled to receive
if the Merger had been completed prior to the happening of such
event.
UCB Stock Options
Each option to acquire one share of UCB Common Stock
granted before the date of the Merger Agreement under the UCB
Incentive Stock Option Plans, and outstanding and unexercised on
the Effective Date, will, under the terms of the Merger
Agreement, be converted into and become an option to acquire
5.00 shares of Meridian Common Stock. The exercise price for the
purchase of each share pursuant to such converted option will be
the present stated exercise price for the purchase of each share
pursuant to such option divided by 5.00.
Opinion of Financial Advisor
On May 23, 1995, Goldman Sachs delivered its written
opinion to the Board of Directors of UCB that as of the date of
such opinion, the Exchange Ratio pursuant to the Merger Agreement
is fair to the holders of shares of UCB Common Stock. Goldman
Sachs subsequently confirmed its earlier opinion by delivery of
its written opinion dated as of the date hereof.
The full text of the written opinion of Goldman
Sachs dated the date hereof, which sets forth assumptions made,
matters considered and limitations on the review undertaken in
connection with the opinion, is attached hereto as Annex C to
this Proxy Statement/Prospectus and is incorporated herein by
reference. Stockholders of UCB are urged to, and should, read
such opinion in its entirety.
In connection with its opinions, Goldman Sachs
reviewed, among other things, (i) the Merger Agreement; (ii) this
Proxy Statement/Prospectus; (iii) the Annual Reports to
Stockholders and Annual Reports on Form 10-K of UCB and Meridian
for the five years ended December 31, 1994; (iv) certain interim
reports to stockholders and Quarterly Reports on Form 10-Q of UCB
and Meridian; (v) certain other communications from UCB and
Meridian to their respective stockholders; (vi) certain internal
financial analyses and forecasts for Meridian prepared by its
management and (vii) certain internal reports (not contemplating
the Merger) for UCB prepared by its management. Goldman Sachs
also held discussions with members of the senior management of
UCB and Meridian regarding the past and current business
operations, regulatory relationships, financial conditions, and
future prospects of their respective companies. In addition,
Goldman Sachs reviewed the reported price and trading activity
for shares of UCB Common Stock and Meridian Common Stock,
compared certain financial and stock market information for UCB
and Meridian with similar information for certain other companies
the securities of which are publicly traded, reviewed the
financial terms of certain recent business combinations in the
banking industry and performed such other studies and analyses as
it considered appropriate.
Goldman Sachs relied without independent
verification upon the accuracy and completeness of all of the
financial and other information reviewed by it for purposes of
the opinions. In that regard, Goldman Sachs assumed, with the
consent of UCB, that the financial forecasts, including, without
limitation, cost savings and operating synergies projected to
result from the Merger prepared solely by Meridian, were
reasonably prepared on a basis reflecting the best currently
available judgments and estimates of the party preparing the
forecasts and that such forecasts will be realized in the amounts
and at the times contemplated thereby. Goldman Sachs are not
experts in the evaluation of loan portfolios for purposes of
assessing the adequacy of the allowances for losses with respect
thereto and assumed, with UCB's consent, that such allowances for
each of UCB and Meridian are adequate to cover all such losses.
In addition, Goldman Sachs has not reviewed individual credit
files nor has it made an independent evaluation or appraisal of
the assets and liabilities of UCB or Meridian or any of their
respective subsidiaries and it has not been furnished with any
such evaluation or appraisal. Goldman Sachs assumed with UCB's
consent that the Merger will be accounted for as a pooling of
interests under generally accepted accounting principles.
The following is a summary of certain of the
financial analyses used by Goldman Sachs in connection with
providing its written opinion to UCB's Board of Directors on
May 23, 1995. Goldman Sachs utilized substantially the same type
of financial analyses in connection with providing the written
opinion attached hereto as Annex C.
(i) Historical Stock Trading Analysis.
Goldman Sachs reviewed the historical trading prices and
volumes for the shares of UCB Common Stock and the
relationship between movements of such shares and
movements in (i) the S&P Regional Bank Composite,
(ii) the S&P 500, (iii) the Meridian Common Stock and
(iv) certain banks with operations that for purposes of
analysis may be considered similar to UCB (the "Peer Bank
Composite Index"). The Peer Bank Composite Index is
composed of the following banks: Commerce Bancorp,
Summit Bancorporation and Valley National Bancorp. In
addition, Goldman Sachs reviewed the historical trading
prices and volumes for the Meridian Common Stock and the
relationship between movements of the Meridian Common
Stock and movements in (i) the S&P 500 and (ii) a
composite index of certain mid-size regional banks (the
"Mid-Size Regional Bank Composite Index"). The Mid-Size
Regional Bank Composite Index is composed of the
following banks: Amsouth Bancorp, Boatmens Bancshares,
Fifth Third Bancorp, First Hawaiian, First Tennessee,
Huntington Bancshares, Integra Financial, Michigan
National, Northern Trust Corp., Signet Banking,
Southtrust Corp, State Street Boston, Union Bank San
Francisco and Star Banc Corp.
(ii) Selected Companies Analysis. Goldman
Sachs reviewed and compared certain financial information
relating to UCB to corresponding financial information,
ratios and public market multiples for three publicly
traded corporations: Commerce Bancorp, Summit
Bancorporation and Valley National Bancorp (the "Selected
Companies"). The Selected Companies were chosen because
they are publicly-traded companies with operations that
for purposes of analysis may be considered similar to
UCB. Goldman Sachs calculated and compared various
financial multiples and ratios of UCB and the Selected
Companies using market data as of May 19, 1995. The
multiples and ratios for UCB were calculated by Goldman
Sachs based on information provided by UCB's management
and the multiples for each of the Selected Companies were
based on the most recent publicly available information.
Earnings figures for the Selected Companies were based on
Institutional Brokers Estimates System median estimates
as of May 11, 1995. With respect to the Selected
Companies, Goldman Sachs considered latest twelve months
("LTM") price/earnings ratios, which ranged from 8.9x to
24.5x compared to 10.6x for UCB (after adjustment for a
gain on the exchange of securities) and estimated
calendar year 1995 and 1996 price/earnings ratios, which
ranged from 8.5x to 10.7x for estimated calendar year
1995 and 7.5x to 10.7x for estimated calendar year 1996
compared to 11.5x for each of estimated calendar years
1995 and 1996, for UCB. Goldman Sachs also considered
for the Selected Companies, market price to tangible book
value ratios, which ranged from 1.4x to 2.2x compared to
1.4x for UCB.
(iii) Selected Transactions Analysis. Goldman
Sachs analyzed certain information relating to selected
transactions in the bank and thrift industry since
January 11, 1994 (the "Selected Transactions"). Such
analysis indicated that for the Selected Transactions
(i) LTM earnings per share multiples ranged from 6.7x to
67.0x, as compared to 13.9x for UCB, and (ii) the
tangible book value multiple ranged from 1.1x to 2.7x, as
compared to 1.92x for UCB.
(iv) Pro Forma Merger Analysis. Goldman Sachs
prepared pro forma analyses of the financial impact of
the Merger. With UCB's consent, earnings estimates for
UCB were based on UCB's management - prepared budget for
1995, and an assumption that UCB's 1996 earnings would be
consistent with 1995. Using these earnings estimates for
UCB and earnings estimates from Institutional Brokers
Estimate System for Meridian as of May 11, 1995 for 1995
and 1996, Goldman Sachs compared the earnings per share
("EPS") of the shares of UCB Common Stock, on a
standalone basis, to the EPS of the common stock of the
combined companies on a pro forma basis. Goldman Sachs
performed this analysis based on consideration of
$165.00 per share of UCB Common Stock and based on a
price of $33.00 per share (the per share price of
Meridian at May 19, 1995) of Meridian Common Stock and
under the following two scenarios: assuming estimated
earnings per share for Meridian in 1995 and 1996 of $3.10
and $3.40, respectively, and assuming estimated earnings
per share for Meridian in 1995 and 1996 of $3.10 and
$3.80, respectively. Based on such analyses, the
proposed transaction would be accretive to UCB's
stockholders on an earnings per share basis in all of the
above scenarios in the years 1995 and 1996.
In addition, based on the current dividend paid on
UCB Common Stock and on the Meridian Common Stock, UCB's
stockholders would receive an additional 131% in dividends on a
pro forma per share basis.
The preparation of a fairness opinion is a complex
process and is not necessarily susceptible to partial analysis or
summary description. Selecting portions of the analyses or of
the summary set forth above, without considering the analyses as
a whole, could create an incomplete view of the processes
underlying Goldman Sachs' opinion. In arriving at its fairness
determination, Goldman Sachs considered the results of all such
analyses. No company or transaction used in the above analyses
as a comparison is identical to UCB or Meridian or the
contemplated transaction. The analyses were prepared solely for
the purposes of Goldman Sachs' providing its opinions to UCB's
Board of Directors as to the fairness to the holders of shares of
UCB Common Stock of the Exchange Ratio to be received for each
share pursuant to the Merger Agreement and do not purport to be
appraisals or necessarily reflect the prices at which businesses
or securities actually may be sold. Analyses based upon
forecasts of future results are not necessarily indicative of
actual future results, which may be significantly more or less
favorable than suggested by such analyses. Because such analyses
are inherently subject to uncertainty, being based upon numerous
factors or events beyond the control of the parties or their
respective advisors, none of UCB, Meridian, Goldman Sachs or any
other person assumes responsibility if future results are
materially different from those forecast. As described above,
Goldman Sachs' opinion to the Board of Directors of UCB was one
of many factors taken into consideration by UCB's Board of
Directors in making its determination to approve the Merger
Agreement. The foregoing summary does not purport to be a
complete description of the analysis performed by Goldman Sachs
and is qualified by reference to the written opinion of Goldman
Sachs set forth in Annex C hereto.
Goldman Sachs, as part of its investment banking
business, is continually engaged in the valuation of businesses
and their securities in connection with mergers and acquisitions,
negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private
placements, and valuations for estate, corporate and other
purposes. UCB selected Goldman Sachs as its financial advisor
because it is a nationally recognized investment banking firm
that has substantial experience in transactions similar to the
Merger. Goldman Sachs regularly provides investment banking
services to Meridian and can be expected to continue to do so.
Pursuant to a letter agreement dated July 27, 1994
and executed by UCB on August 5, 1994 (the "Engagement Letter"),
UCB engaged Goldman Sachs to act as its financial advisor in
connection with the Merger. Pursuant to the terms of the
Engagement Letter, UCB has agreed to pay Goldman Sachs upon
consummation of the Merger a transaction fee of approximately
$____________________. UCB has agreed to reimburse Goldman Sachs
for its reasonable out-of-pocket expenses, including attorney's
fees, and to indemnify Goldman Sachs against certain liabilities,
including certain liabilities under the federal securities laws.
Effective Date of the Merger
The Merger will become effective upon the filing of
Articles of Merger between Meridian and UCB with the Pennsylvania
Department of State. The Merger Agreement may be terminated by
either party if the Merger has not been completed before May 23,
1996 and the terminating party is not in breach of the Merger
Agreement. The Merger Agreement may be terminated by Meridian or
UCB under certain limited circumstances. See "THE MERGER --
Termination; Effect of Termination."
Exchange of UCB Stock Certificates
The conversion of UCB Common Stock into Meridian
Common Stock will occur automatically at the Effective Date.
As soon as practicable after the Effective Date,
Meridian, or a bank or trust company designated by Meridian, in
the capacity of exchange agent (the "Exchange Agent"), will send
a transmittal form to each UCB shareholder. The transmittal form
will contain instructions with respect to the surrender of
certificates representing UCB Common Stock to be exchanged for
Meridian Common Stock.
UCB STOCKHOLDERS SHOULD NOT FORWARD UCB STOCK
CERTIFICATES TO THE EXCHANGE AGENT UNTIL THEY HAVE RECEIVED
TRANSMITTAL FORMS. UCB STOCKHOLDERS SHOULD NOT RETURN STOCK
CERTIFICATES WITH THE ENCLOSED PROXY CARD.
Until the certificates representing UCB Common Stock
are surrendered for exchange after completion of the Merger,
holders of such certificates will not receive the Meridian Common
Stock payable as consideration in the Merger and will not be paid
dividends on the Meridian Common Stock into which such shares
have been converted. When such certificates are surrendered, any
accrued but unpaid dividends will be paid without interest. For
all other purposes, however, each certificate which represents
shares of UCB Common Stock outstanding at the Effective Date will
be deemed to evidence ownership of the shares of Meridian Common
Stock into which those shares have been converted by virtue of
the Merger.
All shares of Meridian Common Stock issued upon
conversion of shares of UCB Common Stock shall be deemed to have
been issued in full satisfaction of all rights pertaining to such
shares of UCB Common Stock, subject, however, to Meridian's
obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Date which may have
been declared or made by UCB on such shares of UCB Common Stock
in accordance with the Merger Agreement on or prior to the
Effective Date and which remain unpaid at the Effective Date.
No fractional shares of Meridian Common Stock will
be issued to any UCB stockholder upon completion of the Merger.
For each fractional share that would otherwise be issued,
Meridian will pay by check an amount equal to the product
obtained by multiplying the fractional share interest to which
such holder would otherwise be entitled by the value of a share
of Meridian Common Stock, such value being determined as provided
in the Merger Agreement.
Conditions to the Merger
The obligations of Meridian and UCB to effect the
Merger are subject to various conditions which include, in
addition to other customary closing conditions, the following:
(i) approval of the Merger Agreement by the
holders of UCB Common Stock (See "THE MEETINGS -- Votes Required;
Quorum");
(ii) receipt of all necessary governmental
approvals for the Merger and expiration or termination of all
waiting periods required by law or imposed by any governmental
authority with respect to the Merger (see "Regulatory Approvals"
herein);
(iii) the absence of any order, decree, or
injunction of a court of competent jurisdiction which enjoins or
prohibits the completion of the Merger or the Bank Merger;
(iv) delivery to each of Meridian and UCB an
opinion of counsel that, among other things, the Merger will be
treated for Federal income tax purposes as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (see "THE MERGER -- Certain Federal Income
Tax Consequences");
(v) the absence of any material adverse change
in the consolidated assets, business, consolidated financial
condition or consolidated results of operations, taken as a
whole, of the other party and its subsidiaries since March 31,
1995; and
(vi) receipt by Meridian of a letter from its
independent certified public accountants to the effect that the
Merger may be accounted for under the "pooling of interests"
method for financial accounting purposes.
In addition, Meridian's obligation to effect the
Merger is subject to, among other conditions, the absence in any
governmental approval for the Merger of any term or condition
that would have a material adverse effect on Meridian and its
subsidiaries, taken as a whole, upon completion of the Merger.
Except for the requirements of shareholder approval,
regulatory approvals and the absence of any order, decree, or
injunction preventing the Merger, each of the conditions
described above may be waived in the manner and to the extent
described in "THE MERGER -- Amendment; Waivers."
Regulatory Approvals
The Merger is subject to approval by the Board of
Governors of the Federal Reserve System (the "Federal Reserve")
under Sections 3 and 4 of the Bank Holding Company Act of 1956
(the "BHCA"), but the Federal Reserve's regulations permit such
approval requirement to be waived and for the FDIC to undertake
the approval process. Requests for such waivers were filed by
Meridian with the Federal Reserve on July 27, 1995. Effective
July 6, 1995, mergers such as the Merger are not subject to
approval of the Pennsylvania Department of Banking.
The Bank Merger is subject to approval by the
Federal Deposit Insurance Corporation ("FDIC"). An Application
for such approval was filed by MBNJ and UCTC with the FDIC on
July 19, 1995. Under the Bank Merger Act, the FDIC must withhold
approval of the Bank Merger if it finds that the transaction
would result in a monopoly or be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize
the business of banking in any geographical area. In addition,
the FDIC may not approve the Bank Merger if it finds that the
effect thereof may be to substantially lessen competition or to
tend to create a monopoly or would in any other manner be in
restraint of trade, unless it finds that the anti-competitive
effects of the Bank Merger are clearly outweighed in the public
interest by the probable effects of the Bank Merger in meeting
the convenience and needs of the communities to be served. The
FDIC will also take into consideration the financial and
managerial resources and future prospects of the resulting bank
following the Bank Merger, as well as the compliance records of
MBNJ and UCTC under the Community Reinvestment Act.
Under the Bank Merger Act, the Bank Merger may not
be completed for 15 days from the date of approval by the FDIC,
during which time the United States Department of Justice or
others may challenge the Bank Merger on antitrust grounds.
The Bank Merger is also subject to approval by the
New Jersey Department of Banking (the "NJDOB"). An application
for such approval was filed with the NJDOB on September ___,
1995. The factors that the NJDOB will consider in determining
whether to grant its approval include the competitive effects of
the Merger, the principles of sound banking and the public
interest and the needs of the communities served by Meridian Bank
and UCTC.
It is anticipated that the regulatory approvals
described above will be obtained during the third quarter of
1995, but no assurance can be given that such regulatory
approvals will be obtained or that the other conditions to the
Merger will be satisfied or waived so as to permit completion of
the Merger. As described under "The Merger -- Termination;
Effect of Termination," if the Merger is not completed prior to
May 23, 1996, Meridian and UCB will each have the right to
terminate the Merger Agreement, provided, however, that the
failure to close is not attributable to a breach by the party
seeking to terminate the Merger Agreement.
Representations and Warranties
The Merger Agreement contains customary
representations and warranties relating to, among other things,
(a) the corporate organization of Meridian, UCB and their
respective subsidiaries; (b) the capital structures of Meridian,
UCB and UCTC; (c) the due authorization, execution, delivery,
performance and enforceability of the Merger Agreement and the
Bank Plan of Merger; (d) consents or approvals of regulatory
authorities or third parties necessary to complete the Merger and
the Bank Merger; (e) the consistency of financial statements with
generally accepted accounting principles; (f) the absence of any
material adverse change in the consolidated financial condition
or consolidated results of operations since March 31, 1995;
(g) the absence of undisclosed material pending or threatened
litigation, claims, actions or governmental investigations;
(h) compliance with applicable laws and regulations; (i) the
accuracy of information supplied by Meridian and UCB in
connection with the Registration Statement on Form S-4 filed with
the Securities and Exchange Commission (the "SEC") in connection
with the issuance of Meridian Common Stock in the Merger, this
Proxy Statement/Prospectus and all applications filed with
regulatory authorities for approval of the Merger or the Bank
Merger; (j) the filing of documents with the SEC and the accuracy
of information contained therein; (k) the filing of tax returns
and consents and the payment of taxes; (l) retirement, pension
and other employee plans and matters relating to the Employee
Retirement Income Security Act of 1974; (m) the absence of
material environmental violations, actions or liabilities;
(n) the adequacy of allowance for loan losses in accordance with
generally accepted accounting principles and all applicable
regulatory criteria, and the absence of any request by regulatory
authorities to increase such allowance; (o) the absence of
undisclosed brokers' or finders' fees; (p) certain contracts
relating to employment, consulting and benefits matters or to
certain indebtedness of Meridian, UCB and their respective
subsidiaries; (q) the quality of title to assets and properties;
(r) the maintenance of insurance similar in amount, scope and
coverage to its peer group, and notices and claims under
insurance policies; (s) the outstanding options (and commitments
to grant options) or other rights to acquire Meridian Common
Stock and UCB Common Stock; and (t) transactions with affiliates.
Business Pending the Merger
Pursuant to the Merger Agreement, Meridian and UCB
have each agreed to use their best efforts to, and UCB has agreed
to cause UCTC to use its best efforts to, preserve their business
organizations intact, to maintain good relationships with
employees and to preserve the goodwill of customers and others
with whom business relationships exist. In addition, UCB has
agreed that UCB and each of its subsidiaries will conduct their
respective businesses and will engage in transactions (including
extensions of credit and pricing deposit liabilities) only in the
ordinary course of business, consistent with past practice and
policies, except as permitted by the Merger Agreement. For
purposes of the Merger Agreement it is not deemed to be conduct
in the ordinary course of business for UCB to: (i) make any
capital expenditure of more than $1 million in any calendar year,
in the aggregate, without the prior written consent of Meridian;
(ii) sell or otherwise dispose of assets having a book or market
value, whichever is greater, of more than $1 million, with
certain exceptions; (iii) enter into any lease, contract or
commitment requiring payments by UCB or any subsidiary of more
than $1 million or a payment to an affiliate of UCB or containing
a material financial commitment and extending beyond 12 months;
or (iv) implement any loan marketing programs at other than
market rates.
In addition, UCB has agreed that neither it nor any
UCB subsidiary may, without the written consent of Meridian,
among other things, (i) change any provision of its certificate
of incorporation or bylaws; (ii) change the number of authorized
or issued shares of its capital stock; (iii) grant options or
similar rights with respect to its capital stock or any
securities convertible into UCB Common Stock; (iv) split, combine
or reclassify any shares of its capital stock; (v) declare, set
aside or pay any dividend or other distribution in respect of its
capital stock, except as specifically permitted by the Merger
Agreement (see "THE MERGER -- Dividends" herein); (vi) grant any
severance pay or increase the compensation of any employee,
officer or director of UCB or any UCB subsidiary, with specified
exceptions, or enter into or amend any employment agreements;
(vii) engage in any merger, acquisition or similar transaction,
except as provided in the Merger Agreement; (viii) permit the
revocation or surrender of a certificate of authority to
maintain, or file an application for the relocation of, or file
an application for a certificate of authority to establish, a
UCTC branch; (ix) sell or otherwise dispose of (a) any assets
other than in the ordinary course of business or (b) any assets
having an aggregate book or market value, whichever is greater,
of more than $1 million; (x) change any accounting practices,
except for implementation of Statement of Financial Accounting
Standards ("SFAS") No. 112, SFAS No. 114, SFAS No. 115 and any
new SFAS standard; (xi) implement any new employee benefit or
welfare plan, or amend any such plan, with specified exceptions;
(xii) compromise, extend or restructure any loan with an unpaid
principal balance exceeding $1 million; (xiii) purchase any
security for its investment portfolio, except pursuant to
policies agreed upon by the parties; (xiv) sell, exchange or
otherwise dispose of any investment securities or loans that are
held for sale, prior to scheduled maturity and other than
pursuant to policies agreed upon from time to time by the
parties; (xv) except as set forth in the Merger Agreement and
consistent with prudent banking practice and UCB's current
underwriting standards, make or modify any loan or other credit
facility commitment; (xvi) except as set forth in the Merger
Agreement and consistent with past practice, enter into, renew,
extend or modify any transaction with, any of its affiliates;
(xvii) enter into any swap or similar commitment, agreement or
arrangement; (xviii) take any further action (other than
continuation of employment in accordance with past practices)
that would give rise to a right of payment to any individual
under any employment agreement or any bonus or performance award
agreement; (xix) take any action that would preclude the receipt
by Meridian of a letter from its independent certified public
accountants to the effect that the Merger may be accounted for
under the "pooling of interests" method for financial accounting
treatment (see "THE MERGER -- Accounting Treatment"); (xx) take
any action which would result in any of the representations and
warranties of UCB set forth in the Merger Agreement becoming
untrue as of the Effective Date or in any of the conditions set
forth in the Merger Agreement not being satisfied; (xxi) waive,
release, grant or transfer any rights of value or modify or
change, in any material respect, any existing agreement to which
UCB or any of its subsidiaries is a party, except in the ordinary
course of business and consistent with past practice;
(xxii) purchase or sell, exchange or otherwise dispose of any
investment securities which would result in the creation of undue
risk with respect to UCB's investment portfolio or sell or
otherwise dispose of any equity securities included in the
investment portfolio; or (xxiii) agree to do any of the
foregoing.
UCB has also agreed in the Merger Agreement, among
other things, (i) to use and to cause each of its subsidiaries to
use commercially reasonable efforts to maintain and increase
deposits (other than certificates of deposit of $100,000 and
over); and (ii) if Meridian requests and agrees to bear the
expense, to retain a proxy solicitor in connection with the
solicitation of UCB stockholder approval of the Merger Agreement.
Meridian and UCB have jointly agreed to:
(i) cooperate in the preparation of filing of all applications
for, and to use their best efforts to obtain as promptly as
practicable, all regulatory consents necessary or advisable to
complete the Merger and the Bank Merger; (ii) use their best
efforts in good faith, and to cause their subsidiaries to use
their best efforts in good faith, to take or cause to be taken
all actions necessary or desirable to permit the completion of
the Merger and the Bank Merger at the earliest possible date
including, without limitation, obtaining all required consents or
approvals of third parties; and (iii) submit the Merger Agreement
to their respective shareholders for approval, if required by
law, at a meeting to be held as soon as practicable and to use
their best efforts to cause their respective Boards of Directors
to unanimously recommend approval of the Merger Agreement to
their shareholders; (iv) cooperate with each other and use their
best efforts to identify those persons who may be deemed to be
affiliates of UCB; (v) cooperate with each other in the
preparation and distribution of press releases, announcements and
other public disclosures related to the Merger Agreement, the
Merger and the Bank Merger; (vi) maintain adequate insurance;
(vii) maintain accurate books and records; (viii) file all tax
returns and pay all taxes when due; and (ix) deliver to the other
monthly and quarterly unaudited financial statements, securities
documents, and other specified corporate information.
Dividends
The Merger Agreement permits UCB to pay a regular
quarterly cash dividend, not to exceed $1.85 per share of UCB
Common Stock outstanding, on each March 1, June 1, September 1
and December 1 prior to the Effective Date, except that UCB is
not permitted, without Meridian's written consent, to pay a
dividend in or for any quarter in which the Effective Date is or
is expected to be on or before Meridian's record date for payment
of its regular quarterly cash dividend on shares of Meridian
Common Stock.
No Solicitation of Transactions
Except as set forth below, UCB has agreed in the
Merger Agreement that it will not solicit or engage in any
discussions with or respond to any person other than Meridian
concerning any acquisition of UCB or any of its subsidiaries
except for responses in connection with investor relations or
pursuant to inquiries of government regulatory authorities.
Prior to September ___, 1995 (the date of effectiveness of the
registration statement of which this Proxy Statement/Prospectus
forms a part), the Merger Agreement permitted UCB to engage in
discussions or negotiations with, or respond to requests for
information, inquiries or other communications from, any person
other than Meridian concerning an acquisition of UCB or its
subsidiaries to the extent such solicitation, engagement or
response may have been legally required for the discharge by
UCB's Board of Directors of its fiduciary duty. See "THE
MERGER -- No Solicitation of Transactions."
The directors, executive officers and certain other
affiliates of UCB have executed a letter agreement containing
provisions similar to those described above relating to UCB, and
such officers and directors have also agreed to be present at the
Special Meeting (in person or by proxy) and to vote shares of UCB
Common Stock owned by them in favor of the Merger. A copy of the
form of letter agreement executed by affiliates of UCB is
included as Exhibit 1 to the Merger Agreement attached hereto as
Annex A.
Amendment; Waivers
Subject to applicable law, Meridian and UCB may, by
written instrument authorized by the Boards of Directors and
signed by duly authorized officers of Meridian and UCB, (i) amend
the Merger Agreement prior to the Effective Date and (ii) extend
the time for performance of any of the obligations or other acts
under the Merger Agreement, waive inaccuracies in any
representations and warranties or waive compliance with any
agreements or conditions contained in the Merger Agreement.
Termination; Effect of Termination
The Merger Agreement may be terminated at any time
prior to the Effective Date by (i) mutual written consent of
Meridian and UCB, or (ii) by either party if (a) the Effective
Date shall not have occurred prior to May 23, 1996, unless such
fact shall be due to the failure of the party seeking to
terminate the Merger Agreement to perform or observe its
agreements set forth in the Merger Agreement and required to be
performed or observed prior to the Effective Date, (b) if either
party has been informed in writing by any regulatory authority
the approval or consent of which has been requested that such
approval or consent is unlikely to be granted, unless such fact
is due to the failure of the party seeking to terminate the
Merger Agreement to perform or observe its agreements set forth
in the Merger Agreement and required to be performed or observed
prior to the Effective Date, (c) any required stockholder
approval of the Merger Agreement is not obtained, unless such
fact is due to the failure of the party seeking to terminate the
Merger Agreement to perform or observe its agreements set forth
in the Merger Agreement and required to be performed or observed
prior to the Effective Date, or (d) any condition to completion
of the Merger set forth in the Merger Agreement cannot reasonably
be met on or before the Effective Date and both parties
reasonably agree that such condition cannot be met.
If the Merger Agreement is terminated pursuant to
its terms, it becomes void. In the event of termination, there
is no further liability on the part of Meridian or UCB to the
other, except that the provisions regarding obligations to keep
certain nonpublic information concerning the other party
confidential, each party's obligation not to hire the other's
employees for a period of six months after termination of the
Merger Agreement, each party's obligation to agree on the content
of public announcements concerning the Merger Agreement, and
agreements regarding expenses and liability arising out of any
uncured willful breach of any covenant or other agreement
contained in the Merger Agreement or any fraudulent breach of a
representation or warranty shall survive termination of the
Merger Agreement.
Management and Operations after the Merger
Subsidiary Bank Merger
In connection with the Merger, MBNJ and UCTC entered
into a Plan of Merger dated as of May 23, 1995 pursuant to which,
concurrently with or as soon as practicable after completion of
the Merger, UCTC will merge with and into MBNJ, with MBNJ
surviving (the "Bank Merger"). Meridian intends to effect the
merger of UCTC and MBNJ simultaneously with or as soon as
practicable after the Effective Date.
Directors and Officers After the Merger
On the Effective Date, the Board of Directors of
Meridian will consist of those persons holding such office
immediately prior to the Effective Date and, as required by the
Merger Agreement, two other persons designated by UCB and
reasonably acceptable to Meridian, one of whom will serve as a
Class II director (which serves until the annual meeting of
Meridian shareholders in 1997) and one of whom will serve as a
Class I or Class III director (which serves until the 1996 and
1998 annual meetings, respectively). The Merger Agreement
requires Meridian to cause such persons to be elected as
directors of Meridian effective as of the Effective Date. On the
Effective Date, the officers of Meridian duly elected and holding
office immediately prior to the Effective Date will be the
officers of Meridian, as the surviving corporation in the Merger.
Each such director or officer is to hold office until his or her
successor is elected and qualified or otherwise in accordance
with the articles of incorporation and the bylaws of Meridian.
On the effective date of the Bank Merger, the Board
of Directors of MBNJ will consist of those persons holding such
office immediately prior to such effective date and, as required
by the Merger Agreement, Albert W. Bossert, Anton J. Campanella,
Edward J. Hobbie, John E. Holobinko, William C. Johnson, Jr.,
Robert P. Kenney, Henry G. Largey, Donald S. Nowicki and
Maureen E. Staub, each of whom is a current director of UCTC.
The other current directors of UCTC are Edward A. Kammler, Jr.
and William G. Palermo, each of whom has reached Meridian's
mandatory director retirement age, and Eugene H. Bauer, who will
become a consultant to Meridian on a limited basis following the
Effective Date. Mr. Bauer will not continue after the Effective
Date as Chairman of the Board, Director, Chief Executive Officer
or in any other capacity (except as a consultant to Meridian) for
UCB, UCTC, their subsidiaries, or the surviving institutions in
the Merger. On the effective date of the Bank Merger, the
officers of MBNJ and UCTC duly elected and holding office
immediately prior to such effective date will be the officers of
MBNJ, as the surviving corporation in the Bank Merger, along with
such officers of UCTC as MBNJ appoints as officers of MBNJ. Each
will hold office until his or her successor is elected and
qualified or otherwise in accordance with the articles of
incorporation, bylaws and policies of MBNJ.
Directors Emeriti Robert J. Bauer and Walter W.
Gauer will no longer serve in such capacity after the Effective
Date. Meridian will retain the members of the two existing
regional boards of directors of UCTC until at least December 31,
1996.
Consolidation of Operations: Projected Operating Cost
Savings and Revenue Enhancements
Meridian expects to achieve certain cost and other
savings and to realize certain revenue enhancements as a result
of the Merger. These cost savings are projected to approximate
25% of UCB's operating expenses and expected to be substantially
realized within the eighteen-month period following the Merger.
Meridian expects that such cost savings will be realized
primarily as the result of the elimination of duplicative
functions in the areas of human resources, data processing and
corporate overhead in either UCB's or Meridian's New Jersey
operations. Meridian also expects to increase revenues during
the same period through increased products and services and a
restructuring of the balance sheet of UCB, primarily in the
investment portfolio. Substantially all of these savings and
revenue enhancements are expected to be achieved in various
amounts at various times during the eighteen-month period
discussed above and not ratably over, or at the beginning or the
end of, such periods.
Because of the uncertainties associated with merging
two institutions located in contiguous markets, changes in the
regulatory environment and changes in economic conditions, no
assurances can be given that (i) any particular level of revenue
enhancements or cost savings will be realized, (ii) such cost
savings will be realized over the time period currently
anticipated, and (iii) such cost savings will not be offset to
some degree by increases in other expenses, including expenses
resulting from integrating the two companies.
Post-Merger Dividend Policy
It is the current intention of the Board of
Directors of Meridian to declare dividends on Meridian Common
Stock following the merger initially in the amount of $.37 per
quarter or $1.48 per year, in each case, per share. UCB
shareholders should note that the level of further dividends will
be determined by Meridian's Board of Directors in light of the
earnings and financial condition of Meridian at the time, as well
as other factors including applicable governmental regulations
and policies. Meridian is a legal entity separate and distinct
from its banking and non-banking subsidiaries, and the principal
sources of Meridian's income are dividends and interest from such
subsidiaries. The payment of dividends by these subsidiaries is
subject to certain restrictions under applicable government
regulations. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
Other
Meridian has agreed in the Merger Agreement to
relocate the executive offices of MBNJ to the Corporate
Headquarters of UCB, Four Commerce Drive, Cranford, New Jersey.
Employee Benefits
The employee benefit plans, arrangements and related
policies of UCB, UCTC and Meridian shall initially be unaffected
by the Merger, except the UCTC Profit Sharing Plan which, as
required by the Merger Agreement, UCB will terminate as of the
Effective Date. Employees of UCB and its subsidiaries
immediately prior to the Effective Date, who become employees of
Meridian or a subsidiary of Meridian, will receive a total
salary, wage, bonus and benefits package no less favorable, in
the aggregate, than that to which they were entitled immediately
prior to the Effective Date. After the Effective Date, Meridian
will review such plans, arrangements and policies with a view
toward consolidating the same to the extent feasible and
economical.
UCB and Meridian contemplate that, subject to
Internal Revenue Service ("IRS") and Pension Benefit Guaranty
Corporation approval, the defined benefit pension plans of UCTC
and Meridian will be merged as soon as administratively feasible.
To the extent former employees of UCB or a UCB Subsidiary become
participants in a plan of Meridian, they will be given past
service credit for eligibility, participation, and vesting
purposes, but not for benefit accrual purposes. For purposes of
benefit accrual, credited service under the Meridian plan will
commence on the day following the date of plan merger. When a
former UCTC plan participant retires, he or she will receive a
benefit which consists of the sum of (i) the benefit determined
under the UCTC plan as it existed as of the date of plan merger
for years of service based on an employee's original employment
date with UCB through the date of plan merger utilizing actual
current compensation earned as of retirement date and (ii) the
benefit calculated under the Meridian plan from the day following
the date of plan merger through retirement date.
UCB will take such steps as may be necessary to
cause the UCTC Profit Sharing Plan to be terminated as of the
Effective Date. The employer contribution, if any, for the year
of plan termination shall be appropriately pro rated to take into
account the portion of the plan year transpiring prior to its
termination date. Provision shall be made for the distribution
of assets to participants, subject to IRS approval. Meridian
will cooperate with the proper funding and disbursement of funds
to UCTC employees entitled to a distribution, including, where
applicable, to IRA rollover accounts.
Meridian will honor and discharge the obligations of
UCTC under the Benefit Equalization Plan which have accrued
immediately prior to the Effective Date and which may thereafter
accrue by reason of Meridian's compliance with the terms of this
Agreement. Meridian will honor and discharge the obligations of
UCTC to its retirees under its post-retirement health care and
life insurance plan. Meridian will honor and discharge the
obligations of UCTC, if any, to its employees who are not retired
under its post-retirement health care and life insurance plan to
the extent such rights are not defeasible, either immediately
prior to or after the Effective Date.
Employees of UCB and its subsidiaries immediately
prior to the Effective Date, who become employees of Meridian or
a subsidiary of Meridian and are involuntarily terminated within
one year thereafter, will receive a severance benefit equal to
one week of pay in effect immediately prior to termination times
the number of whole years of service with UCB, a subsidiary of
UCB, Meridian, and a subsidiary of Meridian, subject to a minimum
and a maximum.
Subject to these provisions, Meridian may at any
time and from time to time following the Merger (i) amend, freeze
or terminate an employee benefit plan of Meridian, UCB or any UCB
subsidiary, or (ii) adopt a new employee benefit plan, either to
replace a prior plan or otherwise.
Accounting Treatment
The Merger is expected to qualify as a pooling-of-
interests for accounting and financial reporting purposes. Under
this method of accounting, the recorded assets and liabilities of
Meridian and UCB will be carried forward to the combined
corporation at their recorded amounts; income of the combined
corporation will include income of both Meridian and UCB for the
entire fiscal year in which the Merger occurs; and the reported
income of the separate corporations for prior periods will be
combined and restated as income of the combined corporation.
Expenses incurred in connection with the Merger will constitute
expenses for the accounting periods to which such expenses
relate. The receipt of a letter from Meridian's independent
auditors confirming that the Merger will qualify for pooling of
interests accounting is a condition to Meridian's obligation to
complete the Merger.
Certain Federal Income Tax Consequences
Completion of the Merger is conditioned upon there
being delivered to both Meridian and UCB the opinion of Stevens &
Lee, counsel to Meridian, that for federal income tax purposes,
under current law, assuming that the Merger and related
transactions will take place as described in the Merger
Agreement, among other things, the Merger will constitute a
reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code), and
Meridian and UCB will each be a party to the reorganization
within the meaning of Section 368(b) of the Code.
In that case, such opinion will also provide, among
other things, that:
(i) no gain or loss will be recognized by
Meridian or UCB in the Merger;
(ii) no gain or loss will be recognized by the
shareholders of UCB upon their receipt of Meridian Common Stock
in exchange for their UCB Common Stock, except that shareholders
who receive cash proceeds for fractional interests in Meridian
Common Stock will recognize gain or loss equal to the difference
between such proceeds and the tax basis allocated to their
fractional share interests, and such gain or loss will constitute
capital gain or loss if their UCB Common Stock is held as a
capital asset at the Effective Date;
(iii) the tax basis of the shares of Meridian
Common Stock (including fractional share interests) received by
the stockholders of UCB will be the same as the tax basis of
their UCB Common Stock exchanged therefor; and
(iv) the holding period of the Meridian Common
Stock in the hands of the UCB stockholders will include the
holding period of their UCB Common Stock exchanged therefor,
provided such UCB Common Stock is held as a capital asset at the
Effective Date.
Under the Merger Agreement, the condition that
Stevens & Lee deliver the opinion described above can be waived
by Meridian and UCB. However, in the event that the delivery of
such opinion of counsel is waived, or such opinion would
otherwise set forth tax consequences materially different to a
shareholder than those described above, Meridian and UCB intend
to resolicit proxies as required in accordance with the rules and
regulations of the Commission.
THE DISCUSSION SET FORTH ABOVE DOES NOT ADDRESS THE
STATE, LOCAL OR FOREIGN TAX ASPECTS OF THE MERGER. THE
DISCUSSION IS BASED ON CURRENTLY EXISTING PROVISIONS OF THE CODE,
EXISTING AND PROPOSED TREASURY REGULATIONS THEREUNDER AND CURRENT
ADMINISTRATIVE RULINGS AND COURT DECISIONS. ALL OF THE FOREGOING
ARE SUBJECT TO CHANGE AND ANY SUCH CHANGE COULD AFFECT THE
CONTINUING VALIDITY OF THIS DISCUSSION. EACH UCB SHAREHOLDER
SHOULD CONSULT HIS OR HER OWN TAX ADVISOR WITH RESPECT TO THE
SPECIFIC TAX CONSEQUENCES OF THE MERGER TO HIM OR HER, INCLUDING
THE APPLICATION AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS.
Expenses
Meridian and UCB will each pay all costs and
expenses incurred by it in connection with the transactions
contemplated hereby, including fees and expenses of financial
consultants, accountants and legal counsel, except Meridian will
pay fees for filings with the Commission and the costs of the
proxy solicitor, if any, engaged in connection with the Special
Meeting.
Resale of Meridian Common Stock
The Meridian Common Stock issued pursuant to the
Merger will be freely transferable under the Securities Act
except for shares issued to any UCB shareholder who may be deemed
to be an "affiliate" of UCB or Meridian for purposes of Rule 145
under the Securities Act. Each such affiliate has entered into
an agreement with Meridian providing that such affiliate will not
transfer any Meridian Common Stock received in the Merger except
in compliance with the Securities Act and will make no
dispositions of any Meridian Common Stock or UCB Common Stock (or
any interest therein), as applicable, until the date on which
financial results covering at least 30 days of combined
operations of Meridian and UCB after the Merger have been
published. This Proxy Statement/Prospectus does not cover
resales of Meridian Common Stock received by any person who may
be deemed an affiliate of UCB or Meridian.
Dividend Reinvestment Plan
Meridian currently maintains a Dividend Reinvestment
and Stock Purchase Plan. This plan provides shareholders of
Meridian with a method of investing cash dividends, as well as
voluntary cash payments, in additional shares of Meridian Common
Stock, without payment of any brokerage commission or service
charge. It is anticipated that, after the Effective Date,
Meridian will continue to offer this plan and stockholders of UCB
who become shareholders of Meridian will be eligible to
participate therein.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Stock Options
The directors and executive officers of UCB
(including certain directors and officers of UCTC who may be
deemed executive officers of UCB for filing purposes under the
Securities Exchange Act of 1934) own approximately 162,673 shares
of UCB Common Stock, including options to purchase 29,184 shares
of UCB Common Stock. All options to purchase UCB Common Stock
outstanding at the Effective Date will be converted into options
to acquire Meridian Common Stock, as is set forth under "THE
MERGER--Terms of the Merger."
Employment Agreements
On September 9, 1993, UCB and UCTC entered into
employment agreements with Eugene H. Bauer; Donald S. Nowicki,
Robert W. Dowens, Sr., J. Richard Pierce and Theodore E. Zuczek
and on April 13, 1995 entered into an employment agreement with
Nicholas A. Frungillo, Jr. The employment agreements expire on
December 31, 2001, but may be terminated upon twelve months prior
notice until the occurrence of a change in control. A change in
control, as defined in the employment agreements, has occurred by
virtue of the Merger Agreement. Meridian and MBNJ have agreed in
the Merger Agreement to accept and assume these employment
agreements.
The employment agreements require the continuation
during the contract period of the executive's salary, bonus and
benefits as such exist now, but the salary, bonus and benefits
may be increased, reduced or modified under certain
circumstances.
After a change in control as defined (which includes
the Merger): The term of the employment agreements may not be
shortened, and the executive's salary, bonus and benefits may not
be reduced. In the event of the executive's death, the
executive's spouse will receive the executive's salary for one
year and health benefits for two years, plus a lump sum equal to
the highest combination of base salary plus incentive
compensation paid in any calendar year to the executive after the
date of the employment agreement. If the executive is terminated
without cause or resigns for good reason, the executive will
receive a lump sum amount equal to his salary and bonus for the
remaining term of the contract, discounted to present value. In
the event the executive resigns without good reason, he is
entitled to receive a lump sum equal to 75% of such amount. In
the event that these and other change in control payments result
in an excise tax ("parachute tax") being imposed upon the
executive under Section 4999 of the Internal Revenue Code (which
imposes a 20% excise tax on excess parachute payments), the
executive is entitled to receive a gross up payment to put the
executive in the same position he would have been in but for the
imposition of such parachute tax.
For purposes of determining payments which would be
received by the executives upon a post-change in control
termination, the salary and incentive compensation, respectively,
payable to the executives for calendar year 1995 is as follows:
Mr. Bauer -- $382,000 and $130,100; Mr. Nowicki -- $198,500 and
$53,600; Mr. Dowens -- $126,000 and $51,000; Mr. Pierce --
$103,300 and $33,500; Mr. Zuczek -- $98,600 and $23,500; and
Mr. Frungillo -- $90,000 and $20,000. Based upon these figures,
an executive who was terminated without cause or resigned with
good reason on December 31, 1995 would receive the following lump
sum amounts; Mr. Bauer -- $2,660,939; Mr. Nowicki -- $1,309,821;
Mr. Dowens -- $920,116; Mr. Pierce -- $710,924; Mr. Zuczek --
$634,298; and Mr. Frungillo -- $571,396.
The employment agreements also provide that if an
executive is covered by UCB's benefit equalization plan ("BEP")
at the time of a change in control, and thereafter the executive
is terminated without cause or resigns with or without good
reason, then the executive's benefits under the BEP will be
calculated as if the executive had continued his employment with
UCB to the end of the term of the employment agreement and had
received after termination or resignation annual compensation
equal to the highest compensation received while employed under
the agreement. Messrs. Bauer and Nowicki are the only executives
currently covered by the BEP.
The employment agreements contain a non-compete
provision restricting the executive from working for any
depository institution in New Jersey during the shorter of
(a) the term of the agreement or (b) a period of two years after
termination of the executive's employment.
On May 23, 1995, UCB and Eugene H. Bauer entered
into an agreement (the "May 23 Agreement") providing for
Mr. Bauer to resign all positions with UCB and UCTC on the
Effective Date and to serve thereafter as a consultant on a
limited basis to Meridian until December 31, 2000. Meridian has
consented to the May 23 Agreement. In his capacity as a
consultant, Mr. Bauer is to receive $12,500 per month, with
annual cost of living increases, and employee welfare benefits
such as hospitalization, medical, dental and disability insurance
coverage. The May 23 Agreement provides that Mr. Bauer is to
receive title to the company automobile he currently uses and use
of a private office with secretarial assistance for a five-year
period.
The May 23 Agreement also clarifies certain
compensation amounts to which Mr. Bauer is entitled pursuant to
his existing employment agreement, his resignation and the change
in control brought about by the Merger. The May 23 Agreement
provides that Mr. Bauer is to be paid on the Effective Date of
the Merger the amounts he would be entitled to receive under his
employment agreement based upon a resignation for good reason
following a change in control. Assuming a Closing Date of
December 31, 1995, this will result in Mr. Bauer's receipt of a
lump sum payment of $2,660,939 based on his salary and incentive
compensation. The May 23 Agreement also clarifies that
Mr. Bauer's profit sharing benefits and pension benefits under
the employment agreement will be paid in a lump sum, based on
specified formulas. Assuming a Closing Date of December 31,
1995, this will result in Mr. Bauer's receipt of a lump sum
payment of $374,904 representing his "profit sharing equalization
amount" under the BEP and a lump sum in an amount not to exceed
$900,000 based on a calculation of his combined pension benefit
under the BEP. In addition, Mr. Bauer is entitled under his
employment agreement to receive a gross up payment to make him
whole for the imposition of parachute taxes which are expected to
be imposed on these change in control payments and other benefits
which may be characterized as change in control payments.
Directors & Officers Insurance; Indemnification
For a period of six years from and after the
Effective Date, Meridian is obligated to indemnify, and advance
expenses in matters which may be subject to indemnification to,
persons who served as directors and officers of UCB or any UCB
subsidiary with respect to liabilities and claims (and related
expenses) made against them resulting from their service as such
prior to the Effective Date in accordance with and subject to the
requirements and other provisions of Meridian's articles of
incorporation and bylaws in effect on the date of the Merger
Agreement and applicable provisions of law to the same extent as
Meridian is obliged thereunder to indemnify and advance expenses
to its own directors and officers with respect to liabilities and
claims made against them resulting from their service with
Meridian.
Meridian, for a period of six years, after the
Effective Date, is also obligated to provide to the persons who
served as directors or officers of UCB or any UCB subsidiary
insurance against liabilities and claims (and related expenses)
made against them resulting from their service as such prior to
the Effective Date.
CERTAIN RELATED TRANSACTIONS
Stock Option Agreement
As a condition to Meridian entering into the Merger
Agreement, UCB executed and delivered to Meridian the Stock
Option Agreement dated May 23, 1995. Pursuant to the Stock
Option Agreement, Meridian was granted an option to purchase
375,000 shares of UCB Common Stock, at a price per share equal to
the lower of $125.00 or the lowest price that a person or group,
other than Meridian or an affiliate of Meridian, paid or offers
to pay upon the occurrence of one of the specified events which
triggers the option, subject to the terms and conditions set
forth therein. The option may only be exercised upon the
occurrence of certain events, including the acquisition by a
person or group of a significant number of shares of UCB Common
Stock, UCB entering into an agreement to merge, consolidate or
sell assets, or a public announcement by a third party of an
intent to acquire control of UCB under certain circumstances. A
copy of the Stock Option Agreement is attached as Annex B to this
Proxy Statement/Prospectus.
The Stock Option Agreement, together with (i) UCB's
agreement to not solicit other transactions relating to the
acquisition of UCB by a third party (see "THE MERGER -- No
Solicitation of Transactions") and (ii) the agreement of
Meridian's and UCB's directors and executive officers to vote
their shares in favor of the Merger Agreement (see "THE SPECIAL
MEETING -- Matters to be Considered at the Special Meeting"), has
the effect of discouraging persons who might now or prior to the
Effective Date be interested in acquiring all of or a significant
interest in UCB from considering or proposing such an
acquisition, even if such persons were prepared to pay a higher
price per share for UCB Common Stock than the price per share
implicit resulting from the Exchange Ratio, at that time.
Certain attempts to acquire UCB or an interest in UCB would cause
the option to become exercisable as described above. Such right
would significantly increase the cost to a potential acquiror of
acquiring UCB compared to its cost had the Stock Option Agreement
not been entered into by Meridian and UCB. Such increased cost
might discourage a potential acquiror from considering or
proposing an acquisition or might result in a potential acquiror
proposing to pay a lower per share price to acquire UCB than it
might otherwise have proposed to pay. In addition, the
managements of Meridian and UCB believe that the existence of the
Stock Option Agreement is likely to prohibit any acquiror of UCB
from accounting for any acquisition of UCB using the
"pooling-of-interests" accounting method. In addition, exercise
of the option would increase the ability of Meridian to obtain
the approval of the shareholders of UCB to complete the Merger
and adversely affect the ability of a third party to obtain the
approval of such shareholders to complete an alternative
transaction. Acquisitions of shares of UCB Common Stock pursuant
to exercises of the option would be subject to prior regulatory
approval under certain circumstances.
<PAGE>
DESCRIPTION OF MERIDIAN CAPITAL SECURITIES
The authorized capital stock of Meridian consists of
200,000,000 shares of common stock, par value $5.00 per share
("Meridian Common Stock"), and 25,000,000 shares of preferred
stock, par value $25.00 per share ("Meridian Preferred Stock").
As of July 31, 1995, there were 58,338,038 shares of Meridian
Common Stock and no shares of Meridian Preferred Stock issued and
outstanding. There are no other shares of capital stock of
Meridian authorized, issued or outstanding. Meridian has no
options, warrants, or other rights authorized, issued or
outstanding, other than as described herein under "Capital Notes"
and "Shareholder Rights Plan" and options granted under the
Meridian Bancorp, Inc. Stock Option Plan, except for 500,000
warrants for Meridian Common Stock issued in connection with
Meridian's acquisition of McGlinn Capital Management, Inc. in
1994.
Common Stock
The holders of Meridian Common Stock are entitled to
share ratably in dividends when and if declared by the Meridian
Board of Directors from funds legally available therefor.
Each holder of Meridian Common Stock has one vote
for each share held of record on each matter presented for
consideration by Meridian shareholders. Meridian shareholders
are not entitled to cumulate votes in the election of directors.
The Meridian Board of Directors is divided into
three classes, each serving three-year terms, so that
approximately one-third of the directors of Meridian are elected
at each annual meeting of shareholders of Meridian.
Classification of the Meridian Board of Directors has the effect
of decreasing the number of directors that could be elected in a
single year by any person who seeks to elect its designees to a
majority of the seats on the Meridian Board of Directors and
thereby could impede a change in control of Meridian.
The holders of Meridian Common Stock have no
preemptive rights to acquire any additional shares of Meridian.
Meridian's Articles of Incorporation authorize the
Meridian Board of Directors to issue authorized shares of
Meridian Common Stock and Meridian Preferred Stock without
shareholder approval. Meridian Common Stock is included for
quotation on the NASDAQ National Market System. As a result, in
order to maintain such inclusion, approval of Meridian's
shareholders is required for the issuance of additional shares of
Meridian Common Stock or securities convertible into Meridian
Common Stock if the issuance of such securities (1) is in
connection with the acquisition of a company, is not in
connection with a public offering for cash, and the securities
issued have or will have voting power equal to or in excess of
20% of the voting power outstanding before such issuance; (2) is
in connection with the acquisition of a company in which a
director, officer or substantial shareholder of Meridian has a 5%
or greater interest and the issuance of the securities could
result in an increase in outstanding common stock or voting power
of 5% or more; (3) is in connection with a transaction other than
a public offering at a price less than the greater of book or
market value, and will equal 20% or more of the common stock or
20% or more of the voting power outstanding before issuance; or
(4) would result in a change in control of Meridian. Under
NASDAQ National Market System rules, shareholder approval is also
required for the establishment of a stock option or purchase plan
in which stock may be acquired by officers and directors other
than a broadly-based plan in which other security holders of
Meridian or employees of Meridian participate. Under applicable
NASDAQ National Market System rules, approval of Meridian
shareholders is not required for issuance of the shares of
Meridian Common Stock issuable to UCB shareholders in the Merger.
In the event of liquidation, dissolution or
winding-up of Meridian, whether voluntary or involuntary, holders
of Meridian Common Stock will be entitled to share ratably in any
of its assets or funds that are available for distribution to its
shareholders after the satisfaction of its liabilities (or after
adequate provision is made therefor) and after payment of any
liquidation preferences of any outstanding Meridian Preferred
Stock.
Preferred Stock
Meridian Preferred Stock may be issued from time to
time as a class, without series or in one or more series, by
resolution of the Meridian Board of Directors. Each series or
class will have such dividend rate, payment dates and dates from
which dividends cumulate, and such general voting, redemption,
liquidation, conversion and sinking fund rights as the Meridian
Board of Directors may determine. All shares of one series must
be identical, and all series will rank equally except with
respect to the rights particular to each series fixed by the
Board. Each series is entitled to receive, when and as declared
by the Board of Directors and before any dividends (other than
dividends payable in Meridian Common Stock) are paid on Meridian
Common Stock, dividends at the rate fixed by the Board for such
series.
Capital Notes
In December 1984, Meridian issued $75 million in
principal amount of Floating Rate Subordinated Capital Notes due
December 1, 1996 (the "Notes") pursuant to an indenture dated as
of December 1, 1984, between Meridian and Morgan Guaranty Trust
Company of New York, as trustee. The Notes bear interest at a
rate of 1/8 of 1% above the arithmetic mean of the London
interbank offered rate (LIBOR) quotations for three-month
Eurodollar deposits, adjusted quarterly. The Notes mature on
December 1, 1996, and are subordinate and junior in right of
payment to senior indebtedness of Meridian. At maturity, the
Notes will be exchanged for capital securities (including
Meridian Common Stock and Meridian Preferred Stock) having a
market value equal to the principal amount of the Notes. Since
December 1, 1988, Meridian has had the option to exchange the
Notes for such capital securities or, under certain
circumstances, for cash prior to maturity. Holders of Notes have
none of the rights or privileges of shareholders of Meridian
until the Notes are exchanged for capital stock. In December
1993, Meridian received approval from the Federal Reserve Bank to
revoke its obligation to exchange the notes for capital
securities at maturity.
Shareholder Rights Plan
Each share of Meridian Common Stock has attached to
it one right (a "Meridian Right") issued pursuant to a Rights
Agreement dated July 25, 1989 (the "Meridian Rights Agreement").
One Meridian Right will be issued with each share of Meridian
Common Stock issued in connection with the Merger. Each Meridian
Right will initially entitle a holder to buy one unit of a newly
authorized series of junior participating preferred stock at an
exercise price of $85.00. The Meridian Rights become exercisable
if a person, group or other entity acquires or announces a tender
offer for 19.9% or more of either the Meridian Common Stock
outstanding or voting securities representing a minimum of 19.9%
of Meridian's total voting power. They can also be exercised if
a person or group who has become a beneficial owner of at least
4.9% (with certain exceptions) of the Meridian Common Stock
outstanding or total voting power is declared by Meridian's Board
of Directors to be an "adverse person" (as defined in the
Meridian Rights Agreement). After the Meridian Rights become
exercisable, the Meridian Rights (other than rights held by a
19.9% beneficial owner or an "adverse person") will entitle the
holders to purchase, under certain circumstances, either Meridian
Common Stock or common stock of the potential acquiror at a
substantially reduced price. Meridian is generally entitled to
redeem the Meridian Rights at $.001 per Meridian Right at any
time until the tenth business day following public announcement
that a 19.9% position has been acquired. The Meridian Rights are
not redeemable following an "adverse person" determination. The
Meridian Rights expire on July 25, 1999.
The Meridian Rights Agreement is incorporated herein
by reference. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE." The foregoing description of the Meridian Rights
does not purport to be complete and is qualified in its entirety
by reference to the Meridian Rights Agreement.
Special Charter and Pennsylvania Corporate Law Provisions
Meridian's Articles of Incorporation and bylaws
contain certain provisions which may have the effect of deterring
or discouraging, among other things, a nonnegotiated tender or
exchange offer for Meridian stock, a proxy contest for control of
Meridian, the assumption of control of Meridian by a holder of a
large block of Meridian's stock and the removal of Meridian's
management. These provisions: (1) empower the Meridian Board of
Directors, without shareholder approval, to issue Meridian
Preferred Stock the terms of which, including voting power, are
set by the Meridian Board; (2) divide the Meridian Board of
Directors into three classes serving staggered three-year terms;
(3) restrict the ability of shareholders to remove directors;
(4) require that shares with at least 80% of total voting power
approve mergers and other similar transactions with a person or
entity holding stock with more than 5% of Meridian's voting
power, if the transaction is not approved, in advance, by the
Meridian Board of Directors; (5) prohibit shareholders' actions
without a meeting; (6) require that shares with at least 80%, or
in certain instances two-thirds, of total voting power approve
repeal or amendment of certain provisions of Meridian's articles
of incorporation; (7) require any person who acquires stock of
Meridian with voting power of 25% or more to offer to purchase
for cash all remaining shares of Meridian's voting stock at the
highest price paid by such person for shares of Meridian's voting
stock during the preceding year; (8) eliminate cumulative voting
in elections of directors; (9) require that shares with at least
two-thirds of total voting power approve repeal or amendment of
Meridian's bylaws; and (10) require advance notice of nominations
for the election of directors and the presentation of shareholder
proposals at meetings of shareholders.
The Pennsylvania Business Corporation Law of 1988
(the "PaBCL") contains certain provisions applicable to Meridian
which may have similar effects. See "COMPARISON OF SHAREHOLDER
RIGHTS."<PAGE>
COMPARISON OF SHAREHOLDER RIGHTS
General
Meridian is a Pennsylvania corporation subject to
the provisions of the PaBCL. UCB is a New Jersey corporation
subject to the provisions of the New Jersey Business Corporation
Act ("NJBCA"). Stockholders of UCB, whose rights are governed by
UCB's Certificate of Incorporation and Bylaws and the NJBCA will,
upon completion of the Merger, become shareholders of Meridian
and, on the Effective Date, their rights as shareholders of
Meridian will be determined by Meridian's Articles of
Incorporation, Meridian's Bylaws and the PaBCL.
The following is a summary of the material
differences in the rights of stockholders of UCB under the UCB's
Certificate of Incorporation, Bylaws and the NJBCA, on the one
hand, and the rights of shareholders of Meridian under Meridian's
Articles of Incorporation, Bylaws and the PaBCL, on the other
hand. The following discussion does not purport to be a complete
discussion of, and is qualified in its entirety by reference to,
the governing law and the Articles or Certificate of
Incorporation and Bylaws of each corporation.
Authorized Capital
UCB's Certificate of Incorporation authorizes the
issuance 6,000,000 of UCB Common Stock, no par value $1.00 stated
value per share, of which ______________ shares were issued and
outstanding as of the Record Date, and 3,000,000 shares of
preferred stock, no par value (the "UCB Preferred Stock"), none
of which were issued and outstanding as of the Record Date. UCB
Preferred Stock is issuable in series, each having such rights,
and preferences as the Board of Directors of UCB may, by adoption
of an amendment of UCB's Certificate of Incorporation, fix and
determine.
Directors
Removal
Pursuant to Meridian's Articles of Incorporation,
Meridian directors may be removed from office without cause by
the affirmative vote of a majority of outstanding voting shares.
UCB's Certificate of Incorporation does not provide for the
removal of directors. However, pursuant to the NJBCA, one or
more UCB directors may be removed without cause by the
affirmative vote of the majority of votes cast by stockholders
entitled to vote for the election of directors.
Nomination
Meridian's Bylaws provide that nominations for the
election of directors may be made by the Board of Directors or
any shareholder entitled to vote for the election of directors.
Written notice of a shareholder's intent to nominate a director
at the meeting must be given by the shareholder and received by
the Secretary of Meridian not less than 30 days nor more than 50
days prior to the date of the annual meeting of shareholders.
However, if less than 21 days' notice of the meeting is given to
shareholders, written notice of a shareholder's intent to
nominate a director is required to be delivered to the Secretary
of Meridian not later than the seventh day following the day on
which notice of the meeting was first mailed to shareholders.
The notice is required to be in writing and contain or be
accompanied by certain information about such shareholder, as
described in Meridian's Bylaws. The chairman of the meeting may,
if the facts warrant, determine and declare to the meeting that
any nomination made at the meeting was not made in accordance
with the foregoing procedures and, in such event, the nomination
will be disregarded.
Neither the Certificate of Incorporation or Bylaws
of UCB nor the NJBCA sets forth the procedures pursuant to which
UCB shareholders may nominate a candidate for election as a
director.
Election of Directors
Meridian's Articles of Incorporation and Bylaws
provide that the Meridian Board of Directors shall be composed of
not less than 12 nor more than 24 directors, the number of which
may be determined by the Meridian Board of Directors. Currently,
the Meridian Board of Directors is composed of 24 members. The
Meridian Board of Directors is divided into three classes, each
serving three-year terms, so that approximately one-third of the
directors of Meridian are elected at each annual meeting of
shareholders of Meridian. Classification of the Meridian Board
of Directors has the effect of decreasing the number of directors
that could be elected in a single year by any person who seeks to
elect its designees to a majority of the seats on the Meridian
Board of Directors and thereby could impede a change in control
of Meridian.
UCB's Bylaws provide that the UCB Board of Directors
shall be composed of not less than 5 nor more than 25 directors,
the number of which may be determined by the UCB Board of
Directors. Currently, the UCB Board of Directors is composed of
six members. UCB's Board of Directors is not classified. All
directors of UCB are elected at each annual meeting of
shareholders of UCB. Therefore, any person who seeks to elect
its designees to a majority of the seats on the UCB Board of
Directors could do so at any annual meeting.
Cumulative Voting
Neither Meridian's nor UCB's shareholders are
permitted to cumulate votes in the election of directors.
Limited Liability
As permitted by the PaBCL, Meridian's Bylaws provide
that directors of Meridian are not personally liable for taking
or failing to take any action unless the director breached or
failed to perform the duties of his or her office as set forth
under Pennsylvania law and such breach or failure constitutes
self-dealing, willful misconduct or recklessness; provided,
however, that there is no such elimination of liability arising
under any criminal statute or with respect to the payment of
taxes pursuant to local, state or federal law.
As permitted by the NJBCA, UCB's Certificate of
Incorporation provides that directors of UCB are not personally
liable for breach of any duty owed to UCB or its shareholders,
unless such breach of duty is the result of an act or omission
(i) in breach of such director's duty of loyalty to UCB or its
shareholders, (ii) not in good faith or involving a knowing
violation of law, or (iii) resulting in receipt by such person of
an improper personal benefit.
Indemnification
As permitted by the PaBCL, Meridian's Bylaws provide
for indemnification of directors, officers and agents for certain
litigation-related liabilities and expenses unless the
individual's conduct is determined by a court to have constituted
willful misconduct or reckless conduct.
As permitted by the NJBCA, UCB's Certificate of
Incorporation provides for indemnification of directors,
officers, employees and agents of UCB, and any other person
serving in such capacity with any other entity at the request of
UCB, for certain litigation-related liabilities and expenses to
the full extent permitted under the NJBCA.
Shareholders' Meetings
Meridian's Bylaws provide that the Board of
Directors may fix the date and time of the annual meeting of
shareholders, but if no such date is fixed, the meeting for any
calendar year is to be held on the third Tuesday of April in such
year. Notice of the annual meeting of shareholders must be given
not less than 10 days before the date of the meeting. The
presence, in person or by proxy, of shareholders entitled to cast
at least 66-2/3% of the votes that all shareholders are entitled
to cast constitutes a quorum for the transaction of business at
the meeting. Meridian's Bylaws provide that special meetings of
shareholders may be called at any time by any of the following:
(1) the Chief Executive Officer, Chairman or President of
Meridian; (2) the Board of Directors of Meridian or the Executive
Committee thereof; or (3) Meridian shareholders entitled to cast
at least 20% of the votes which all shareholders are entitled to
cast at the meeting. Notice of special meetings of shareholders
must be given not less than 10 days before the date of the
meeting.
UCB's Bylaws provide that the Board of Directors may
fix the date and time of the annual meeting of shareholders.
Notice of the annual meeting of shareholders must be given not
less than 10 days nor more than 60 days prior to the date of the
meeting. The presence, in person or by proxy, of a majority of
the outstanding voting shares constitute a quorum for the
transaction of business at the meeting. A special meeting of
UCB's shareholders may be called at any time by any of the
following: (1) the Chairman or President of UCB, or (2) a
majority of the Board of Directors. The NJBCA provides that
holders of 10% or more of all the shares entitled to vote may
apply to the Superior Court of New Jersey to order that a special
meeting of shareholders be held. Notice of a special meeting of
shareholders must be given not less than 10 nor more than 60 days
prior to the date of the meeting.
Meridian's Bylaws set forth procedures pursuant to
which any business, including the nomination of directors by a
shareholder, may be properly brought by a shareholder before an
annual meeting of shareholders. Neither UCB's Bylaws nor its
Certificate of Incorporation set forth similar procedures.
Shareholder Rights Plan
Meridian has adopted a shareholder rights plan
pursuant to which holders of Meridian Common Stock are entitled,
under certain circumstances generally involving an accumulation
of Meridian Common Stock, to purchase Meridian Common Stock or
common stock of the potential acquiror at a substantially reduced
price. See "DESCRIPTION OF MERIDIAN CAPITAL SECURITIES --
Shareholder Rights Plan." UCB has not adopted a shareholder
rights plan.
Antitakeover Provisions
Meridian is subject to some, but not all, of various
provisions of the PaBCL which are triggered, in general, if any
person or group acquires, or discloses an intent to acquire, 20%
or more of the voting power of a covered corporation, other than
pursuant to a registered firm commitment underwriting or, in
certain cases, pursuant to the approving vote of the board of
directors. The relevant provisions are contained in Subchapters
25E-H of the PaBCL.
Subchapter 25E of the PaBCL (relating to control
transactions) provides that if any person or group acquires 20%
or more of the voting power of a covered corporation, the
remaining shareholders may demand from such person or group the
fair value of their shares, including a proportionate amount of
any control premium.
Subchapter 25F of the PaBCL (relating to business
combinations) delays for five years and imposes conditions upon
"business combinations" between an "interested shareholder" and
the corporation. The term "business combination" is defined
broadly to include various transactions utilizing a corporation's
assets for purchase price amortization or refinancing purposes.
For this purpose, an "interested shareholder" is defined
generally as the beneficial owner of at least 20% of a
corporation's voting shares.
Subchapter 25G of the PaBCL (relating to control-
share acquisitions) prevents a person who has acquired 20% or
more of the voting power of a covered corporation from voting
such shares unless the "disinterested" shareholders approve such
voting rights. Failure to obtain such approval exposes the owner
to the risk of a forced sale of the shares to the issuer. Even
if shareholder approval is obtained, the corporation is also
subject to Subchapters 25I and J of the PaBCL. Subchapter 25I
provides for a minimum severance payment to certain employees
terminated within two years of the approval. Subchapter 25J
prohibits the abrogation of certain labor contracts prior to
their stated date of expiration.
Subchapter 25H of the PaBCL (relating to
disgorgement) applies in the event that (i) any person or group
publicly discloses that the person or group may acquire control
of the corporation or (ii) a person or group acquires (or
publicly discloses an offer or intent to acquire) 20% or more of
the voting power of the corporation and, in either case, sells
shares within 18 months thereafter. Any profits from sales of
equity securities of the corporation by the person or group
during the 18-month period belong to the corporation if the
securities that were sold were acquired during the 18-month
period or within 24 months prior thereto.
Subchapters 25E-H of the PaBCL contain a wide
variety of transactional and status exemptions, exclusions and
safe harbors. As permitted under the PaBCL, Meridian has opted
out of the provisions of Subchapters 25G and H but is subject to
the provisions of Subchapters 25E and F. Such action can be
reversed under certain circumstances.
In addition, the fiduciary duty standards applicable
to the Board of Directors of Meridian under the PaBCL and certain
provisions of Meridian's Articles of Incorporation and Bylaws may
have the effect of deterring or discouraging, among other things,
a nonnegotiated tender or exchange offer for Meridian stock, a
proxy contest for control of Meridian, the assumption of control
of Meridian by a holder of a large block of Meridian's stock and
the removal of Meridian's management. See "Description of
Meridian Capital Securities - Special Charter and Pennsylvania
Corporation Law Provisions."
Under a provision of the Pennsylvania Banking Code
of 1965 designed to protect shareholders of Pennsylvania banking
institutions, subject to certain exceptions, no person may offer
to acquire, or acquire, control of more than 10% of the
outstanding shares of a Pennsylvania banking institution or 5% of
the outstanding shares of a Pennsylvania banking institution if
such institution had net operating loss carry forwards in excess
of 20% of its total shareholders' equity as reported in its most
recent publicly available annual financial statements, without
the prior written approval of the Pennsylvania Department of
Banking.
The New Jersey Shareholders Protection Act ("NJSPA")
provides that no corporation organized under the laws of New
Jersey with its principal executive offices or significant
operations located in New Jersey (a "New Jersey Resident Domestic
Corporation") may engage in any "business combination" (as
defined in the NJSPA, a "Business Combination") with any
interested shareholder (as defined in the NJSPA, an "Interested
Stockholder") of that New Jersey Resident Domestic Corporation
for a period of five years following that Interested
Stockholder's stock acquisition unless that Business Combination
is approved by the board of directors of that New Jersey Resident
Domestic Corporation prior to that Interested Stockholder's stock
acquisition. The term Business Combination as defined in the
NJSPA includes, among other things, certain mergers,
consolidations, asset transfers, stock issuances, plans of
liquidation and recapitalizations. Interested Stockholder, as
defined in the NJSPA, includes certain holders of 10% or more of
the voting power of the outstanding voting stock of that New
Jersey Resident Domestic Corporation and certain affiliates of
the New Jersey Resident Domestic Corporation that at any time
within the five year period immediately prior to the date in
question were the beneficial owners, directly or indirectly, of
10% or more of the voting power of the then outstanding stock of
the New Jersey Resident Domestic Corporation.
Pursuant to the NJSPA, no New Jersey Resident
Domestic Corporation may engage, at any time, in any Business
Combination with any Interested Stockholder of that New Jersey
Resident Domestic Corporation other than: (i) a Business
Combination approved by the board of directors of that New Jersey
Resident Domestic Corporation prior to that Interested
Stockholder's stock acquisition, (ii) a Business Combination
approved by the affirmative vote of the holders of two-thirds of
the voting stock not beneficially owned by that Interested
Stockholder at a meeting called for such purpose, or (iii) a
Business Combination where the Interested Stockholder pays a
formula price designed to ensure that all holders (other than the
Interested Stockholder) of stock of the New Jersey Resident
Domestic Corporation receive at least the highest price per share
paid by that Interested Stockholder. The NJSPA does not apply to
certain inadvertent acquisitions, provided the shareholder
divests itself or himself of a sufficient number of shares in
accordance with the NJSPA. A New Jersey Resident Domestic
Corporation may not opt-out of the NJSPA.
Under the NJBCA, the director of a New Jersey
corporation may consider, in discharging his or her duties to the
corporation and in determining what he or she reasonably believes
to be in the best interest of the corporation, any of the
following (in addition to the effects of any action on
shareholders): (i) the effects of the action on the
corporation's employees, suppliers, creditors and customers,
(ii) the effects of the action on the community in which the
corporation operates and (iii) the long-term as well as the
short-term interests of the corporation and its shareholders,
including the possibility that these interests may be best served
by the continued independence of the corporation. If, on the
basis of the foregoing factors, the board of directors determines
that any proposal or offer to acquire the corporation is not in
the best interest of the corporation, it may reject such proposal
or offer, in which event the board of directors will have no duty
to remove any obstacles to, or refrain from impeding, such
proposal or offer.
Required Shareholder Vote
General
Subject to the voting rights of any series of
Meridian Preferred Stock then outstanding, the holders of
Meridian Common Stock possess exclusive voting rights of
Meridian. Each holder of Meridian Common Stock is entitled to
one vote for each share owned of record. There are no cumulative
voting rights in the election of directors. For general
corporate action of the shareholders of Meridian, the affirmative
vote of a majority of the votes cast in person or by proxy at a
shareholders' meeting is required for approval.
Subject to the voting rights of any series of UCB
Preferred Stock then outstanding, the holders of UCB Common Stock
possess exclusive voting rights of UCB. Each holder of UCB
Common Stock is entitled to one vote for each share owned of
record. There are no cumulative voting rights in the election of
directors. For general corporate action of the shareholders of
UCB, the affirmative vote of the majority of votes cast at any
shareholders' meeting is required for approval.
Fundamental Changes
Meridian's Articles of Incorporation require that a
plan of merger, consolidation, share exchange, division,
conversion or asset transfer (in respect of a sale, lease,
exchange or other disposition of all, or substantially all, the
assets of Meridian other than in the usual and regular course of
business) must be approved by the affirmative vote of
shareholders entitled to cast at least a majority of the votes
which all shareholders are entitled to cast. In the absence of
prior approval by Meridian's Board of Directors, Meridian's
Articles of Incorporation require a vote of shareholders with at
least 80% of Meridian's total voting power to approve any merger,
consolidation, share exchange, asset transfer (in respect of a
sale, lease, exchange or other disposition of all, or
substantially all, the assets of Meridian) or similar
transactions involving a shareholder holding 5% or more of
Meridian's voting power.
UCB's Certificate of Incorporation requires a
supermajority vote of shareholders to approve business
combinations (includes any merger, consolidation, or any sale,
transfer, or other disposition of all or a substantial part of
the assets of UCB). For a business combination which has been
recommended by at least 66-2/3% of UCB's Board of Directors, the
affirmative vote of 66-2/3% of the shares entitled to vote is
required for approval. For a business combination which has not
been recommended by at least 66-2/3% of UCB's Board of Directors,
the affirmative vote of 75% of the shares entitled to vote is
required for approval.
Amendment of Articles or Certificate of Incorporation
Meridian's Articles of Incorporation contain various
provisions that require a supermajority vote of shareholders to
amend or repeal particular sections of such Articles. Amendment
or repeal of the provisions of Meridian's Articles of
Incorporation relating to noncumulative voting, the
classification of directors, the requirement of holding meetings
for shareholder action, the amendment of Bylaws generally, and
the consideration of non-economic factors by Meridian's Board of
Directors if evaluating a tender offer, all require a 66-2/3%
vote of shareholders, absent prior Meridian Board approval. In
the case of certain other provisions, including the supermajority
vote requirement on a merger or similar transaction with a 5% or
greater Meridian shareholder, amendment or repeal requires a vote
of shareholders owning 80% of Meridian's outstanding shares or a
66-2/3% vote of both Meridian's Board of Directors and its
shareholders.
The NJBCA provides that a corporation's articles of
incorporation may be amended upon approval of such corporation's
board of directors and the affirmative vote of a majority of the
votes cast by shareholders entitled to vote, subject to any
supermajority requirements set forth in such articles of
incorporation. UCB's Certificate of Incorporation requires the
affirmative vote of 66-2/3% of the shares entitled to vote to
amend any of the provisions set forth in Article VI of UCB's
Certificate of Incorporation regarding business combinations.
Amendment of Bylaws
The authority to amend or repeal Meridian's Bylaws
is vested in Meridian's Board of Directors, subject always to the
power of the shareholders of Meridian to change such action by
the affirmative vote of shareholders holding at least 66-2/3% of
the voting power (except that any amendment to the
indemnification provisions set forth in the Bylaws requires the
affirmative vote of 66-2/3% of the Board of Directors or
shareholders holding 80% of the voting power).
UCB's Bylaws may be amended by the Board of
Directors of UCB or by the affirmative vote of the majority of
votes cast by shareholders entitled to vote on such amendment.
Mandatory Tender Offer Provision
Meridian's Articles of Incorporation provide that
any person or entity acquiring Meridian capital stock with 25% or
more of Meridian's total voting power is required to offer to
purchase, for cash, all shares of Meridian's voting stock, at a
price per share equal to the highest price paid by such person
for each respective class of Meridian's voting stock within the
preceding twelve months. UCB's Certificate of Incorporation
contains no equivalent provision. The Pennsylvania BCL also
provides that following any acquisition by a person or group of
more than 20% of a publicly-held corporation's voting stock, the
remaining shareholders have the right to receive payment, in
cash, for their shares from such person or group of an amount
equal to the "fair value" of their shares. The NJBCA contains no
equivalent provision.
Dissenters' Rights
Under the PaBCL, a shareholder of a corporation is
generally entitled to receive payment for the fair value of such
shareholder's shares if such shareholder duly exercises its
dissenters' rights with respect to a plan of merger or
consolidation, share exchange or asset transfer, to which such
corporation is a party, except if the shares are (i) listed on a
national securities exchange or (ii) held by more than 2,000
shareholders. The foregoing market exceptions do not apply, and
dissenters' rights generally are available in respect of,
(i) shares that are not converted solely into shares or shares
and money in lieu of fractional shares, (ii) shares of any
preferred or special class unless the shareholders of the class
are entitled to vote on the plan and such class vote is required
for the adoption of the plan or to effectuate the transaction and
(iii) shares which under the plan are treated differently from
shares of the same class or series and which are not entitled to
vote as a special class under PaBCL Section 1906(c). The PaBCL allows a
corporation to provide dissenters' rights notwithstanding the
statutory exceptions but Meridian's Articles of Incorporation and
Bylaws do not require such optional dissenters' rights. Under
the PaBCL, if a plan of merger or consolidation, share exchange,
asset transfer, division or conversion is adopted by the
directors only, without any shareholder approvals required, the
shareholders have no statutory dissenters' rights in respect of
the plan other than optional dissenters' rights, if any. In
respect of the Merger, as permitted under the PaBCL, the plan has
been adopted by the Meridian Board of Directors, no action is
required by Meridian shareholders and no optional dissenters'
rights have been granted to Meridian shareholders.
The NJBCA generally provides for dissenters' rights
in connection with any merger or consolidation or any sale,
lease, exchange, or other disposition of all or substantially all
of the assets of the corporation not in the usual or ordinary
course of business. However, no such rights exist with respect
to (i) any class or series of shares that is listed on a national
securities exchange or is held of record by not less than
1,000 holders on the record date fixed to determine the
shareholders entitled to vote on the transaction, or, generally,
(ii) any transaction in connection with which the shareholders of
the corporation will receive only (a) cash, (b) securities that,
upon consummation of the transaction, will be listed on a
national securities exchange or held by record by not less than
1,000 holders, or (c) cash and such securities. A shareholder of
a corporation may also dissent from any acquisition of shares
owned by such shareholder in connection with the acquisition by
another New Jersey corporation, in exchange for its shares, of
all the shares of a class or series of securities of such
corporation. Any shareholder that perfects dissenters' rights
under the NJBCA is entitled to receive the "fair value" of such
shares as determined either by agreement between such shareholder
and the corporation or by a court of competent jurisdiction. UCB
shareholders have no dissenters' rights with respect to the
Merger.
Dividends
Under the PaBCL, a corporation may pay dividends
unless, after giving effect thereto, (i) the corporation would be
unable to pay its debts as they come due in the usual course of
business or (ii) the total assets of the corporation would be
less than the sum of its total liabilities plus the amount that
would be needed, if the corporation were to be dissolved at the
time as of which the distribution is measured, to satisfy the
preferential rights upon dissolution of shareholders whose
preferential rights are superior to those receiving the
distribution.
Subject to any restrictions contained in a
corporation's certificate of incorporation, the NJBCA provides
that a corporation may pay dividends unless, after giving effect
thereto, (i) the corporation would be unable to pay its debts as
they become due in the usual course of its business or (ii) the
corporation's total assets would be less than its total
liabilities. UCB's Certificate of Incorporation provides that no
dividends may be paid on UCB Common Stock if UCB is in default
with respect to any dividend due and payable on, or any sinking
fund or redemption requirements with respect to, any outstanding
UCB Preferred Stock.
Voluntary Dissolution
Under the PaBCL, if Meridian's Board of Directors
recommends that Meridian be dissolved and directs that the
question be submitted to a vote at a meeting of shareholders,
Meridian may be dissolved upon the affirmative vote of a majority
of the votes cast by all shareholders entitled to vote thereon
and, if any class of shares is entitled to vote thereon as a
class, the affirmative vote of a majority of the votes cast in
each class vote. Under Meridian's Articles of Incorporation if
at least 66-2/3% of Meridian's Board of Directors has not
recommended that Meridian be dissolved, Meridian may be dissolved
upon the affirmative vote of shareholders entitled to cast at
least 80% of the votes which all shareholders are entitled to
cast.
Under the NJBCA, UCB may be dissolved upon the
consent of all its shareholders entitled to vote thereon or,
alternatively, if the UCB Board recommends that UCB be dissolved
and directs that the question be submitted to a vote at a meeting
of shareholders, UCB may be dissolved upon the affirmative vote
of a majority of the votes cast by the shareholders entitled to
vote thereon and, if any class or series of securities of UCB is
entitled to vote on such motion as a class, upon the affirmative
vote of a majority of the votes cast by each such class. If the
dissolution is proposed by, on behalf of or pursuant to any
agreement, arrangement or understanding with an Interested
Stockholder, the NJSPA will apply. See "Antitakeover Provisions"
above.
Preemptive Rights
Neither the holders of Meridian Common Stock nor UCB
Common Stock are entitled to preemptive rights.
<PAGE>
ADJOURNMENT OF SPECIAL MEETING
In the event there are not sufficient votes to
constitute a quorum or approve the adoption of the Merger
Agreement at the time of the Special Meeting, such proposal could
not be approved unless the Special Meeting were adjourned in
order to permit further solicitation of proxies. In order to
allow proxies that have been received by UCB at the time of the
Special Meeting to be voted for such adjournment, if necessary,
UCB has submitted the question of adjournment under such
circumstances to its stockholders as a separate matter for their
consideration. A majority of the shares represented and voting
at the Special Meeting is required in order to approve any such
adjournment. The Board of Directors of UCB recommends that
shareholders vote their proxies in favor of such adjournment so
that their proxies may be used for such purposes in the event it
should become necessary. Properly executed proxies will be voted
in favor of any such adjournment unless otherwise indicated
thereon. If it is necessary to adjourn the Special Meeting, no
notice of the time and place of the adjourned meeting is required
to be given to shareholders other than an announcement of such
time and place at the Special Meeting.
<PAGE>
EXPERTS
The consolidated financial statements of Meridian
and subsidiaries as of December 31, 1994 and 1993, and for each
of the years in the three-year period ended December 31, 1994,
have been incorporated by reference herein and in the
Registration Statement in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing. The report of KPMG
Peat Marwick LLP covering the aforementioned financial statements
contains an explanatory paragraph which discusses that Meridian
adopted the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities,
and No. 112, Employers' Accounting for Postemployment Benefits,
in 1994, and No. 106, Employers' Accounting for Postretirement
Benefits Other Than Pensions, and No. 109, Accounting for Income
Taxes, in 1993.
The consolidated financial statements of UCB as of
December 31, 1994 and 1993 and for each of the years in the
three-year period ended December 31, 1994, have been incorporated
by reference herein and in the Registration Statement in reliance
upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon
the authority of said firm as experts in accounting and auditing.
The report of KPMG Peat Marwick LLP covering the aforementioned
consolidated financial statements refers to a change in method of
accounting for certain investments in debt and equity securities
in 1994, income taxes in 1993 and post-retirement benefits other
than pensions in 1992.
LEGAL MATTERS
The validity of the Meridian Common Stock to be
issued is being passed upon for Meridian by the law firm of
Stevens & Lee, Reading, Pennsylvania, special counsel to
Meridian. Sidney D. Kline, Jr., a director of Meridian, is a
principal of the firm of Stevens & Lee. Certain attorneys at
Stevens & Lee and members of their immediate families own or have
investment discretion with respect to an aggregate of less than
75,000 shares of Meridian Common Stock.
STOCKHOLDER PROPOSALS
To be eligible for inclusion in UCB's proxy
materials relating to UCB's annual meeting of stockholders to be
held in 1996 (if the Merger is not effected by that date), a
stockholder proposal must be received by the Secretary of UCB on
or before November 10, 1995.
OTHER MATTERS
As of the date of this Proxy Statement/Prospectus,
the Board of Directors of UCB knows of no matters which will be
presented for consideration at the Special Meeting other than as
set forth in the Notice of Special Meeting accompanying this
Proxy Statement/Prospectus. However, if any other matters shall
come before the meeting or any adjournments thereof and be voted
upon, the enclosed Proxy shall be deemed to confer discretionary
authority to the individuals named as proxies therein to vote the
shares represented by such Proxy as to any such matters.
<PAGE>
ANNEX A
AGREEMENT AND PLAN
OF MERGER
between
MERIDIAN BANCORP, INC.
and
UNITED COUNTIES BANCORPORATION
May 23, 1995
<PAGE>
AGREEMENT
TABLE OF CONTENTS
Page
BACKGROUND.................................................. 1
AGREEMENT................................................... 1
ARTICLE I
Section 1.01 Definitions................................... 1
Section 1.02 The Merger.................................... 7
Section 1.03 The Bank Merger................................ 12
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF UCB
Section 2.01 Organization.................................. 12
Section 2.02 Capitalization................................ 13
Section 2.03 Authority; No Violation....................... 14
Section 2.04 Consents; Dissenters' Rights.................. 15
Section 2.05 Financial Statements.......................... 16
Section 2.06 Taxes......................................... 16
Section 2.07 No Material Adverse Change.................... 17
Section 2.08 Contracts..................................... 17
Section 2.09 Ownership of Property; Insurance Coverage..... 19
Section 2.10 Legal Proceedings............................. 20
Section 2.11 Compliance With Applicable Law................ 20
Section 2.12 ERISA......................................... 21
Section 2.13 Brokers and Finders........................... 22
Section 2.14 Environmental Matters......................... 22
Section 2.15 Loan Portfolio................................ 22
Section 2.16 Information to be Supplied.................... 22
Section 2.17 Securities Documents.......................... 23
Section 2.18 Related Party Transactions.................... 23
Section 2.19 Investment Banking Opinion.................... 23
Section 2.20 Antitakeover Provisions Inapplicable.......... 23
Section 2.21 Quality of Representations.................... 24
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MERIDIAN
Section 3.01 Organization.................................. 24
Section 3.02 Capital Structure............................. 25
Section 3.03 Authority; No Violation....................... 26
Section 3.04 Consents...................................... 27
Section 3.05 Financial Statements.......................... 27
Section 3.07 No Material Adverse Change.................... 29
Section 3.08 Contracts..................................... 29
Section 3.09 Ownership of Property; Insurance Coverage..... 30
Section 3.10 Legal Proceedings............................. 30
Section 3.11 Compliance With Applicable Law................ 31
Section 3.12 ERISA......................................... 31
Section 3.13 Brokers and Finders........................... 32
Section 3.14 Environmental Matters......................... 32
Section 3.15 Loan Portfolio................................ 32
Section 3.16 Information to be Supplied.................... 33
Section 3.17 Securities Documents.......................... 33
Section 3.18 Related Party Transactions.................... 33
Section 3.19 Investment Banking Opinion..................... 34
Section 3.20 Quality of Representations..................... 34
ARTICLE IV
COVENANTS OF THE PARTIES
Section 4.01 Conduct of UCB's Business...................... 34
Section 4.02 Access; Confidentiality........................ 38
Section 4.03 Regulatory Matters and Consents................ 39
Section 4.04 Taking of Necessary Action..................... 39
Section 4.05 Certain Agreements............................ 40
Section 4.06 No Other Bids and Related Matters.............. 41
Section 4.07 Core Deposits.................................. 42
Section 4.08 Duty to Advise; Duty to Update UCB's
Disclosure Schedule...................................... 42
Section 4.09 Conduct of Meridian's Business................. 42
Section 4.10 Board and Committee Minutes and Meetings....... 42
Section 4.11 Undertakings by Meridian and UCB.............. 42
Section 4.12 Employee Benefits............................. 44
Section 4.13 Employee Relations............................ 46
Section 4.14 Relocation of Corporate Headquarters.......... 46
Section 4.15 Post-Closing Board Membership................. 46
ARTICLE V
CONDITIONS
Section 5.01 Conditions to UCB's Obligations under this
Agreement.............................................. 47
Section 5.02 Conditions to Meridian's Obligations under
this Agreement......................................... 49
ARTICLE VI
TERMINATION, WAIVER AND AMENDMENT
Section 6.01 Termination................................... 51
Section 6.02 Effect of Termination......................... 52
ARTICLE VII
MISCELLANEOUS
Section 7.01 Expenses...................................... 52
Section 7.02 Survival of Representations, Warranties and
Covenants.............................................. 52
Section 7.03 Amendment, Extension and Waiver............... 52
Section 7.04 Entire Agreement.............................. 53
Section 7.05 No Assignment................................. 53
Section 7.06 Notices....................................... 53
Section 7.07 Captions...................................... 54
Section 7.08 Counterparts.................................. 54
Section 7.09 Severability.................................. 54
Section 7.10 Governing Law................................. 55
Exhibit 1 UCB Affiliate Agreement
Exhibit 2 Stock Option Agreement
Exhibit 3 Bank Plan of Merger
Exhibit 4 Form of Opinion of Meridian's Counsel
Exhibit 5 Form of Tax Opinion of Meridian's
Counsel
Exhibit 6 Form of Opinion of UCB's Counsel
<PAGE>
AGREEMENT
THIS AGREEMENT AND PLAN OF MERGER, dated as of
May 23, 1995, is made by and between MERIDIAN BANCORP, INC.
("Meridian"), a Pennsylvania corporation, having its principal
place of business at 35 North Sixth Street, Reading, Pennsylvania
19603, and UNITED COUNTIES BANCORPORATION ("UCB"), a New Jersey
corporation, having its principal place of business at Four
Commerce Drive, Cranford, New Jersey 07016.
BACKGROUND
1. Meridian and UCB desire to cause the merger of
UCB with and into Meridian, with Meridian surviving such merger,
in accordance with the applicable laws of the Commonwealth of
Pennsylvania and the State of New Jersey, and in accordance with
the plan of merger set forth herein.
2. After approval by the Board of Directors of UCB
and prior to the execution and delivery of this Agreement, and as
a condition and inducement to Meridian's execution of this
Agreement (a) certain directors, officers and shareholders of UCB
executed, in favor of Meridian, a Letter Agreement dated May 23,
1995, in the form attached hereto as Exhibit 1, and (b) UCB
granted to Meridian an option to acquire, under certain
circumstances, UCB's common stock (the "Meridian Option")
pursuant to a Stock Option Agreement between Meridian and UCB
dated May 23, 1995, in the form attached hereto as Exhibit 2.
3. Meridian desires to merge United Counties Trust
Company, a New Jersey banking corporation and a wholly-owned
subsidiary of UCB ("UCTC") into and with Meridian Bank, New
Jersey, a New Jersey banking corporation and a wholly-owned
subsidiary of Meridian ("MBNJ"), with MBNJ surviving such merger
in accordance with the Bank Plan of Merger in the form attached
hereto as Exhibit 3.
4. Meridian and UCB desire to provide the terms
and conditions governing the transactions contemplated herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and
of the mutual covenants, agreements, representations and
warranties herein contained, the parties hereto, intending to be
legally bound, do hereby agree as follows:
ARTICLE I
Section 1.01 Definitions. As used in this
Agreement, the following terms shall have the indicated meanings
(such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
Affiliate means, with respect to any Person,
any Person who directly, or indirectly, through one or
more intermediaries, controls, or is controlled by, or is
under common control with, such Person and, without
limiting the generality of the foregoing, includes any
executive officer, director or 5% equity owner of such
Person.
Agreement means this agreement, and any
amendment or supplement hereto, which constitutes a "plan
of merger" between Meridian and UCB.
Applications means the applications for
regulatory approval which are required by the
transactions contemplated hereby.
Articles of Merger means the articles of merger
to be executed by Meridian and UCB and to be filed in the
PDS and the NJDS, in accordance with the applicable laws
of the Commonwealth of Pennsylvania and the State of New
Jersey.
Bank Merger means the merger of UCTC with and
into MBNJ, with MBNJ surviving such merger, contemplated
by Section 1.03 of this Agreement.
Bank Plan of Merger has the meaning given to
that term in Section 1.03 of this Agreement.
Bank Regulatory Authority means any banking
agency or department of any federal or state government,
including without limitation the FRB, the FDIC, the PDB,
the NJDB or the respective staffs thereof.
BCL means the Pennsylvania Business Corporation
Law of 1988, as amended.
BHC Act means the Bank Holding Company Act of
1956, as amended.
Closing Date means the seventh business day
after the last condition precedent pursuant to this
Agreement has been fulfilled or waived, or such other
date as Meridian and UCB shall agree.
Compensation and Benefits Package has the
meaning given to that term in Section 4.12 of this
Agreement.
Effective Date means the date upon which the
Articles of Merger shall be filed with the PDS and the
NJSOS.
Environmental Law means any federal, state,
local or foreign law, statute, ordinance, rule,
regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or
agreement with any Environmental Regulatory Authority
relating to (i) the protection, preservation or
restoration of the environment (including, without
limitation, air, water vapor, surface water, groundwater,
drinking water supply, surface soil, subsurface soil,
plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling,
labeling, production, release or disposal of any
substance presently listed, defined, designated or
classified as hazardous, toxic, radioactive or dangerous,
or otherwise regulated, whether by type or by quantity,
including any material containing any such substance as a
component.
Environmental Regulatory Authority means,
individually and collectively, any one or more of the
United States Environmental Protection Agency, the
Commonwealth of Pennsylvania Department of Environmental
Resources, the NJDERE, the United States Occupational
Safety and Health Administration, the Commonwealth of
Pennsylvania Department of Labor and Industry, and United
States Army Corps of Engineers and any other federal,
state or local administration, agency or bureau charged
with the establishment of regulations, or the
administration or enforcement of laws and regulations,
pertaining to the use, storage, transport or disposal of
hazardous or toxic substances, protection of wetlands or
worker safety, or otherwise pertaining to the protection
of the environment.
ERISA means the Employee Retirement Income
Security Act of 1974, as amended.
Exchange Act means the Securities Exchange Act
of 1934, as amended, and the rules and regulations
promulgated from time to time thereunder.
Exchange Agent has the meaning given to the
term in Section 1.02(f)(iii) of this Agreement.
Exchange Ratio has the meaning given to the
term in Section 1.02(e)(ii) of this Agreement.
FDIC means the Federal Deposit Insurance
Corporation.
FRB means the Federal Reserve Board.
GAAP means generally accepted accounting
principles as in effect at any particular time.
IRC means the Internal Revenue Code of 1986, as
amended.
IRS means the Internal Revenue Service.
Material Adverse Change shall mean, with
respect to Meridian or UCB, any adverse change in
financial condition or results of operations which is
material to such entity on a consolidated basis.
Material Adverse Effect (only when such precise
phrase is used) shall mean, with respect to Meridian or
UCB, any adverse effect on assets, business, financial
condition or results of operations which is material to
such entity on a consolidated basis.
Merger means the merger of UCB with and into
Meridian, with Meridian surviving such merger,
contemplated by this Agreement.
Meridian Bank means Meridian Bank, a
Pennsylvania bank and trust company, all the outstanding
capital stock of which is owned by Meridian.
Meridian Common Stock has the meaning given to
that term in Section 3.02(a) of this Agreement.
Meridian Disclosure Schedule means a disclosure
schedule delivered by Meridian to UCB pursuant to
Article III of this Agreement.
Meridian ESOP means the Meridian Bancorp, Inc.
Employee Stock Ownership Plan.
Meridian Financials means (i) the audited
consolidated financial statements of Meridian contained
in Meridian's annual report on Form 10-K for the year
ended December 31, 1994, and (ii) the unaudited interim
consolidated financial statements of Meridian as of each
calendar quarter thereafter included in Securities
Documents filed by Meridian prior to the Effective Date.
Meridian Option means the option granted to
Meridian to acquire shares of UCB Common Stock referenced
in the Background Section of this Agreement.
Meridian Regulatory Agreement has the meaning
given to that term in Section 3.11 of this Agreement.
Meridian Regulatory Reports means the Call
Reports, consolidated reports of condition and income,
and accompanying schedules, filed by Meridian Bank,
Delaware Trust, MBNJ and other current or prior Meridian
banking subsidiaries, if any, with any Regulatory
Authority for each calendar quarter, beginning with the
quarter ended December 31, 1992, through the Closing
Date.
Meridian Rights Agreement means the Rights
Agreement dated as of July 25, 1989, as amended, between
Meridian and Meridian Bank, as rights agent, relating to
Meridian's Series A Junior Participating Preferred Stock.
Meridian Stock Purchase Rights means Rights to
purchase a unit of Meridian's Series A Junior
Participating Preferred Stock in accordance with the
terms of the Meridian Rights Agreement.
Meridian Subsidiaries means any Subsidiary of
Meridian.
NASD means the National Association of
Securities Dealers, Inc.
NJBCA means the New Jersey Business Corporation
Act, as amended.
NJDB means the Department of Banking of the
State of New Jersey.
NJDEPE means the New Jersey Department of
Environmental Protection and Energy.
NJSOS means the Office of the Secretary of
State of the State of New Jersey.
PDB means the Department of Banking of the
Commonwealth of Pennsylvania.
PDS means the Department of State of the
Commonwealth of Pennsylvania.
Person means any individual, corporation,
partnership, joint venture, association, trust, other
entity or "group" (as that term is defined under the
Exchange Act).
Prospectus/Proxy Statement means the
prospectus/proxy statement, together with any supplements
thereto, to be transmitted to holders of UCB Common Stock
in connection with the transactions contemplated by this
Agreement.
Registration Statement means the registration
statement on Form S-4, including any pre-effective or
post-effective amendments or supplements thereto, to be
filed with the SEC under the Securities Act with respect
to the Meridian Common Stock and Meridian Stock Purchase
Rights to be issued in connection with the transactions
contemplated by this Agreement.
Regulatory Authority means any Bank Regulatory
Authority or Environmental Regulatory Authority.
Rights means warrants, options, rights,
convertible securities and other capital stock
equivalents which obligate an entity to issue its
securities.
SEC means the Securities and Exchange
Commission.
Securities Act means the Securities Act of
1933, as amended, and the rules and regulations
promulgated from time to time thereunder.
Securities Documents means all registration
statements, schedules, statements, forms, reports, proxy
material, and other documents required to be filed under
the Securities Laws.
Securities Laws means the Securities Act and
the Exchange Act and the rules and regulations
promulgated from time to time thereunder.
Subsidiary of any Person means any corporation
or other entity, 50% or more of the capital stock or
equivalent ownership interest of which is owned, either
directly or indirectly, by such Person, except any
corporation or other entity the stock or equivalent
ownership interest of which is held in the ordinary
course of the lending activities of such Person (if such
Person is a bank) or is held in the ordinary course of
the lending activities of a bank Subsidiary of such
Person.
UCB Common Stock means the common stock of UCB
described in Section 2.02(a).
UCB Disclosure Schedule means a disclosure
schedule delivered by UCB to Meridian pursuant to
Article II of this Agreement.
UCB Financials means (i) the audited
consolidated financial statements of UCB contained in
UCB's annual report on Form 10-K for the year ended
December 31, 1994, and (ii) the unaudited interim
consolidated financial statements of UCB as of each
calendar quarter thereafter included in Securities
Documents filed by UCB.
UCB Regulatory Agreement has the meaning given
to that term in Section 2.11 of this Agreement.
UCB Regulatory Reports means the Call Reports,
consolidated reports of condition and income, and
accompanying schedules, filed by UCTC and other prior UCB
banking subsidiaries, if any, with any Regulatory
Authority for each calendar quarter, beginning with the
quarter ended December 31, 1992, through the Closing
Date.
UCB Subsidiaries means any Subsidiary of UCB.
Section 1.02 The Merger.
(a) Closing. The Closing will take place at
10:00 a.m. on the Closing Date at the offices of counsel to
Meridian, unless another time and place are agreed to by the
parties hereto, provided in any case that all conditions to
Closing set forth in Article V have been satisfied or waived at
or prior to Closing. UCB and Meridian shall cause the Articles
of Merger to be duly executed at the Closing and to be filed in
the PDS and the NJSOS immediately after the Closing.
(b) The Merger. Subject to the terms and
conditions of this Agreement, on the Effective Date: UCB shall
merge with and into Meridian; the separate existence of UCB shall
cease; Meridian shall be the surviving corporation in the
Merger; and all of the property (real, personal and mixed),
rights, powers and duties and obligations of UCB shall be taken
and deemed to be transferred to and vested in Meridian, as the
surviving corporation in the Merger, without further act or deed;
all debts, liabilities and duties of each of UCB and Meridian
shall thereafter be the responsibility of Meridian as the
surviving corporation; all in accordance with the applicable laws
of the Commonwealth of Pennsylvania and the State of New Jersey.
(c) Meridian's Articles of Incorporation and
Bylaws. On and after the Effective Date, the articles of
incorporation and the bylaws of Meridian, as in effect
immediately prior to the Effective Date, shall automatically be
and remain the articles of incorporation and bylaws of Meridian,
as the surviving corporation in the Merger, until thereafter
altered, amended or repealed.
(d) Board of Directors and Officers of
Meridian and MBNJ.
(i) On the Effective Date, the Board of
Directors of Meridian, as the surviving corporation in
connection with the Merger, shall consist of those
persons holding such office immediately prior to the
Effective Date (after the changes in the Board made on or
before the Closing date in accordance with
Section 5.01(l)).
(ii) On the Effective Date, the officers
of Meridian duly elected and holding office immediately
prior to the Effective Date shall be the officers of
Meridian, as the surviving corporation in the Merger.
(iii) On the effective date of the Bank
Merger, the officers of UCTC and MBNJ duly elected and
holding office immediately prior to such effective date
shall be the officers of MBNJ, as the surviving
corporation in the Bank Merger.
(iv) On the effective date of the Bank
Merger, the directors of MBNJ as the surviving
institution in connection with the Bank Merger shall
consist of those persons holding such office immediately
prior to the Effective Date after the appointment of
additional directors pursuant to Section 5.01(l).
(e) Conversion of Shares.
(i) Meridian Common Stock.
(A) Each share of Meridian Common
Stock issued and outstanding immediately prior to the
Effective Date shall, on and after the Effective Date,
continue to be issued and outstanding as an identical
share of Meridian Common Stock.
(B) Each share of Meridian Common
Stock issued and held in the treasury of Meridian as of
the Effective Date, if any, shall, on and after the
Effective Date, continue to be issued and held in the
treasury of Meridian.
(ii) UCB Common Stock.
(A) Subject to the provisions of
subparagraphs (B), (C) and (D) of this
Section 1.02(e)(ii), each share of UCB Common Stock
issued and outstanding immediately prior to the
Effective Date (other than shares of such common
stock described in subparagraph (B) or (C) below)
shall, on the Effective Date, by reason of the
Merger and without any action on the part of the
holder thereof, be converted into and become a right
to receive, subject to adjustment as provided in
Section 1.02(e)(iv), five (5.00) fully paid and
nonassessable shares of Meridian Common Stock and
the corresponding percentage of Meridian Stock
Purchase Rights pursuant to the Meridian Rights
Agreement (the "Exchange Ratio").
(B) Each share of UCB Common Stock
owned by Meridian or a Meridian Subsidiary (other
than in a fiduciary capacity) on the Effective Date,
if any, shall be cancelled.
(C) Each share of UCB Common Stock
issued and held in the treasury of UCB or owned by
any UCB Subsidiary (other than in a fiduciary
capacity) as of the Effective Date, if any, shall be
cancelled, and no cash, stock or other property
shall be delivered in exchange therefor.
(D) No fraction of a whole share of
Meridian Common Stock and no scrip or certificates
therefor shall be issued in connection with the
Merger. Any former holder of UCB Common Stock who
would otherwise be entitled to receive a fraction
of a share of Meridian Common Stock shall receive,
in lieu thereof, cash in an amount equal to such
fraction of a share multiplied by the market value
of Meridian Common Stock (determined in accordance
with the provisions of Section 1.02(e)(iii) hereof).
(E) Each option granted under the
UCB's 1984 and 1989 Incentive Stock Option Plans to
acquire a share of UCB Common Stock which is
outstanding and unexercised on the Effective Date,
shall, subject to adjustment as provided in Sections
1.02(e)(iv), be converted into and become an option
to acquire that number of shares of Meridian Common
Stock equal to the Exchange Ratio, at the present
stated exercise price of such option divided by the
Exchange Ratio, such shares to be issuable upon the
exercise of such options in accordance with the
terms of the respective plans under which they were
issued. Shares of Meridian Common Stock issuable
upon exercise of such options shall be covered by an
effective registration statement on Form S-8.
(iii) Valuation of Meridian Common Stock.
For purposes of this Agreement, the term "Market Value"
of a share of Meridian Common Stock shall mean the
average of the closing sale price of a share of Meridian
Common Stock, as reported on the National Association of
Securities Dealers Automated Quotation System (NASDAQ)
National Market System, for the first 20 of the 25
consecutive trading days immediately prior to the Closing
Date.
(iv) Anti-Dilution Provisions. If
Meridian shall, at any time before the Effective Date,
(A) issue a dividend in shares of Meridian Common Stock,
(B) combine the outstanding shares of Meridian Common
Stock into a smaller number of shares, (C) subdivide the
outstanding shares of Meridian Common Stock, or
(D) reclassify the shares of Meridian Common Stock, then,
in any such or similar event, the Exchange Ratio shall be
adjusted so that each UCB shareholder and optionholder
shall be entitled to receive such number of shares of
Meridian Common Stock and such other rights, privileges
and securities as such shareholder or optionholder, as
the case may be, would have been entitled to receive if
the Effective Date had occurred prior to the happening of
such event. (By way of illustration, if Meridian shall
declare a stock dividend of 7% payable with respect to a
record date on or prior to the Effective Date, the
Exchange Ratio shall be increased by 7%). All changes in
the Exchange Ratio pursuant to this Section 1.02(e)(iv)
shall be cumulative.
(f) Surrender and Exchange of UCB Stock
Certificates.
(i) Exchange of Certificates. Each
holder of shares of UCB Common Stock who surrenders to
Meridian the certificate or certificates representing
such shares will be entitled to receive, as soon as
practicable after the Effective Date, in exchange
therefor an unlegended certificate or certificates for
the number of whole shares of Meridian Common Stock into
which such holder's shares of UCB Common Stock have been
converted by the Merger, together with a check for cash
in lieu of any fractional share in accordance with
Section 1.02(e)(ii)(D) hereof.
(ii) Rights Evidenced by Certificates.
Each certificate representing shares of Meridian Common
Stock issued in exchange for certificates representing
UCB Common Stock pursuant to Section 1.02(f)(i) hereof
will be dated the Effective Date and be entitled to
dividends and all other rights and privileges pertaining
to such shares of Meridian Common Stock from the
Effective Date. Until surrendered, each certificate
theretofore evidencing shares of UCB Common Stock will,
from and after the Effective Date, evidence solely the
right to receive certificates for shares of Meridian
Common Stock pursuant to Section 1.02(f)(i) hereof and a
check for cash in lieu of any fractional share in
accordance with Section 1.02(e)(ii)(D) hereof. If
certificates for shares of UCB Common Stock are exchanged
for Meridian Common Stock at a date following one or more
record dates for the payment of dividends or of any other
distribution on the shares of Meridian Common Stock,
Meridian will pay cash in an amount equal to dividends
theretofore payable on such Meridian Common Stock and pay
or deliver any other distribution to which holders of
shares of Meridian Common Stock have theretofore become
entitled. No interest will accrue or be payable in
respect of dividends or cash otherwise payable under this
Section 1.02(f) upon surrender of certificates for shares
of UCB Common Stock. Notwithstanding the foregoing, no
party hereto will be liable to any holder of UCB Common
Stock for any amount paid in good faith to a public
official or agency pursuant to any applicable abandoned
property, escheat or similar law. Until such time as
certificates for shares of UCB Common Stock are
surrendered by a UCB shareholder to Meridian for
exchange, Meridian shall have the right to withhold
dividends or any other distributions on the shares of
Meridian Common Stock issuable to such shareholder.
(iii) Exchange Procedures. Meridian
shall designate Meridian Bank as exchange agent hereunder
(the "Exchange Agent") and shall cause the Exchange Agent
to follow the procedures set forth herein. Each
certificate for shares of UCB Common Stock delivered for
exchange under this Section 1.02(f) must be endorsed in
blank by the registered holder thereof or be accompanied
by a power of attorney to transfer such shares endorsed
in blank by such holder. Except as set forth in the next
sentence, if more than one certificate is surrendered at
one time and in one transmittal package for the same
shareholder account, the number of whole shares of
Meridian Common Stock for which certificates will be
issued pursuant to this Section 1.02(f) will be computed
on the basis of the aggregate number of shares
represented by the certificates so surrendered. Upon
their request, former shareholders of UCB (or any of
them) shall be entitled to the number of stock
certificates they held representing shares of Meridian
Common Stock as equals the number of stock certificates
representing former shares of UCB Common Stock. If
shares of Meridian Common Stock or payments of cash are
to be issued or made to a person other than the one in
whose name the surrendered certificate is registered, the
certificate so surrendered must be properly endorsed in
blank, with signature(s) guaranteed, or otherwise in
proper form for transfer, and the person to whom
certificates representing shares of Meridian Common Stock
is to be issued or to whom cash is to be paid shall pay
any transfer or other taxes required by reason of such
issuance or payment to a person other than the registered
holder of the certificate representing shares of UCB
Common Stock which are surrendered. As promptly as
practicable after the Closing Date has been established,
the Exchange Agent shall send or cause to be sent to each
shareholder of record of UCB Common Stock transmittal
materials, in form and substance satisfactory to Meridian
and UCB, for use in exchanging certificates representing
UCB Common Stock for certificates representing Meridian
Common Stock into which the former have been converted in
the Merger. Certificates representing shares of Meridian
Common Stock shall be mailed to former shareholders of
UCB (or made available for pickup, if the former
shareholder of UCB so requests) as soon as reasonably
possible but in no event later than seven (7) business
days following the receipt of certificates representing
former shares of UCB Common Stock duly endorsed or
accompanied by the materials referenced herein (but in no
event earlier than the second business day following the
Effective Date).
(iv) Closing of Stock Transfer Books;
Cancellation of UCB Certificates. Upon the Effective
Date, the stock transfer books for UCB Common Stock will
be closed and no further transfers of shares of UCB
Common Stock will thereafter be made or recognized. All
certificates for shares of UCB Common Stock surrendered
pursuant to this Section 1.02(f) will be cancelled by
Meridian.
(g) Payment Procedures. As soon as
practicable after the Effective Date, Meridian shall make payment
of the cash consideration provided for in Section 1.02(e)(ii)(D)
to each person entitled thereto.
(h) Meridian Option. Upon the Effective Date,
the Meridian option shall be automatically cancelled and shall be
of no further force and effect.
Section 1.03 The Bank Merger. Meridian and UCB
shall use their best efforts to cause UCTC to merge with and into
MBNJ, with MBNJ surviving such merger, simultaneously with or as
soon as practicable after the Effective Date. Concurrently with
the execution and delivery of this Agreement, Meridian shall
cause MBNJ, and UCB shall cause UCTC, to execute and deliver the
Bank Plan of Merger attached hereto as Exhibit 3.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF UCB
UCB hereby represents and warrants to Meridian that,
except as specifically set forth herein or in the UCB Disclosure
Schedule delivered to Meridian by UCB on May 23, 1995:
Section 2.01 Organization.
(a) UCB is a corporation duly organized,
validly existing and in good standing under the laws of the State
of New Jersey. UCB is a bank holding company duly registered
under the BHC Act. UCB has the corporate power and authority to
carry on its business and operations as now being conducted and
to own and operate the properties and assets now owned and being
operated by it. UCB is not qualified or licensed to do business
as a foreign corporation in any other jurisdiction and is not
required to be so qualified or licensed as the result of the
ownership or leasing of property or the conduct of its business,
except in such jurisdictions where failure to be so qualified or
licensed will not have a Material Adverse Effect on UCB.
(b) UCTC is a banking corporation duly
organized and validly existing under the laws of the State of New
Jersey. UCTC is not a member of the Federal Reserve System.
UCTC has the corporate power and authority to carry on its
business and operations as now being conducted and to own and
operate the properties and assets now owned and being operated by
it. UCTC is not qualified or licensed to do business as a
foreign corporation in any other jurisdiction and is not required
to be so qualified or licensed as the result of the ownership or
leasing of property or the conduct of its business, except in
such jurisdictions where failure to be so qualified or licensed
will not have a material adverse effect on the assets, business,
financial condition or results of operations of UCTC.
(c) UCB has no Subsidiaries other than UCTC,
United Capital Corporation, Unitrust Financial Corporation,
United Counties Service Corporation, Scarlett O'Hara's, Inc. and
those identified in the UCB Disclosure Schedule.
(d) UCTC is a commercial bank the deposits of
which are insured by the Bank Insurance Fund of the FDIC to the
extent provided in the Federal Deposit Insurance Act.
(e) The respective minute books of UCB and
UCTC and each other UCB Subsidiary accurately record, in all
material respects, all material corporate actions of their
respective shareholders and boards of directors (including
committees) through the date of this Agreement.
(f) UCB has delivered to Meridian, or will
deliver within five business days of the date hereof, true and
correct copies of the articles of incorporation and bylaws of UCB
and of UCTC, respectively, as in effect on the date hereof.
Section 2.02 Capitalization.
(a) As of April 30, 1995, the authorized
capital stock of UCB consists of (a) 6,000,000 shares of common
stock, with a stated value of $1.00 ("UCB Common Stock"), of
which: (i) 2,142,738 shares are outstanding, validly issued,
fully paid and nonassessable and free of preemptive rights and
(ii) 381,438 shares are held by UCB as treasury stock, and
(b) 3,000,000 shares of no par, no stated value preferred stock,
none of which are issued or outstanding. Except as set forth in
the UCB Disclosure Schedule, there has been no change in the
authorized, issued or outstanding shares of UCB. Neither UCB nor
UCTC nor any other UCB or UCTC Subsidiary has or is bound by any
subscription, option, warrant, call, commitment, agreement, plan
or other Right of any character relating to the purchase, sale or
issuance or voting of, or right to receive dividends or other
distributions on any shares of UCB Common Stock, UCB Preferred
Stock or any other security of UCB or any securities representing
the right to vote, purchase or otherwise receive any shares of
UCB Common Stock, UCB Preferred Stock or any other security of
UCB, other than for (i) shares issuable under the Meridian Option
and (ii) 64,032 shares which UCB is obligated to issue, at an
average exercise price of approximately $60, under UCB's 1984
Incentive Stock Option Plan and UCB's 1989 Stock Option Plan to
its employees and employees of UCB Subsidiaries, including UCTC.
(b) The authorized capital stock of UCTC
consists of 2,425,900 shares of common stock, par value $5.00 per
share ("UCTC Common Stock"), of which 2,425,900 shares are
outstanding, validly issued, fully paid, nonassessable, free of
preemptive rights and owned by UCB. Neither UCB nor any other
UCB Subsidiary has or is bound by any subscription, option,
warrant, call, commitment, agreement or other Right of any
character relating to the purchase, sale or issuance or voting
of, or right to receive dividends or other distributions on any
shares of the capital stock of any UCB Subsidiary or any other
security of any UCB Subsidiary or any securities representing the
right to vote, purchase or otherwise receive any shares of the
capital stock or any other security of any UCB Subsidiary.
Either UCB or UCTC owns all of the outstanding shares of capital
stock of each UCB Subsidiary free and clear of all liens,
security interests, pledges, charges, encumbrances, agreements
and restrictions of any kind or nature. There are no
subscriptions, options, warrants, calls, commitments, agreements
or other Rights outstanding with respect to the capital stock of
UCTC or any other UCB Subsidiary.
(c) Neither (i) UCB nor, (ii) UCTC nor
(iii) any other UCB or UCTC Subsidiary owns any equity interest,
directly or indirectly, in any other company or controls any
other company, except for equity interests identified in
Section 2.01(c) hereof, equity interests held in the investment
portfolios of UCB or UCB Subsidiaries, equity interests held by
UCB Subsidiaries in a fiduciary capacity, and equity interests
held in connection with the commercial loan and ancillary real
estate activities of UCB Subsidiaries. As used in this
paragraph, "equity interests" include any subscriptions, options,
warrants, calls, commitments, agreements or other Rights.
(d) No Person is known to UCB to be the
beneficial owner (as defined in Section 13(d) of the Exchange
Act) of 5% or more of the outstanding shares of UCB Common Stock,
except as disclosed in UCB's proxy statement used in connection
with its 1995 meeting of shareholders, previously delivered to
Meridian.
(e) UCB does not maintain a dividend
reinvestment or similar plan providing for the reinvestment of
dividends to purchase additional shares of UCB Common Stock.
Section 2.03 Authority; No Violation.
(a) UCB has full corporate power and authority
to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. UCTC has full corporate power
and authority to execute and deliver the Bank Plan of Merger and
to consummate the Bank Merger. The execution and delivery of
this Agreement by UCB and the completion by UCB of the
transactions contemplated hereby have been duly and validly
approved by the Board of Directors of UCB and, except for
approval by the shareholders of UCB as required under the NJBCA,
UCB's articles of incorporation and bylaws and NASDAQ
requirements applicable to it, no other corporate proceedings on
the part of UCB are necessary to complete the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by UCB and, subject to approval of the
shareholders of UCB as required under the NJBCA, UCB's articles
of incorporation and bylaws and NASDAQ requirements applicable to
it and receipt of the required approvals of Regulatory
Authorities referred to in Section 3.04 hereof, and constitutes
the valid and binding obligation of UCB, enforceable against UCB
in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and subject, as to enforceability, to general principles of
equity. Subject to UCB shareholder approval of this Agreement,
the Bank Plan of Merger, upon its execution and delivery by UCTC
concurrently with the execution and delivery of this Agreement,
will constitute the valid and binding obligation of UCTC,
enforceable against UCTC in accordance with its terms, subject to
applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and subject, as to enforceability, to
general principles of equity.
(b) (A) The execution and delivery of this
Agreement by UCB, (B) the execution and delivery of the Bank Plan
of Merger by UCTC, (C) subject to receipt of approvals from the
Bank Regulatory Authorities referred to in Section 3.04 hereof
and UCB's and Meridian's compliance with any conditions contained
therein, the completion of the transactions contemplated hereby,
and (D) compliance by UCB or UCTC with any of the terms or
provisions hereof or of the Bank Plan of Merger will not
(i) conflict with or result in a breach of any provision of the
certificate of incorporation or bylaws of UCB or any UCB
Subsidiary; (ii) violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction
applicable to UCB or any UCB Subsidiary or any of their
respective properties or assets; or (iii) violate, conflict with,
result in a breach of any provisions of, constitute a default (or
an event which, with notice or lapse of time, or both, would
constitute a default) under, result in the termination of,
accelerate the performance required by, or result in a right of
termination or acceleration or the creation of any lien, security
interest, charge or other encumbrance upon any of the properties
or assets of UCB or any UCB Subsidiary under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture,
deed of trust, license, lease, agreement, commitment or other
instrument or obligation to which UCB or any UCB Subsidiary is a
party, or by which they or any of their respective properties or
assets may be bound or affected, except for such violations,
conflicts, breaches or defaults under clause (ii) or (iii) hereof
which, either individually or in the aggregate, will not have a
Material Adverse Effect on UCB, or a Material Adverse Effect on
the ability of UCB to perform any of its obligations under this
Agreement.
Section 2.04 Consents; Dissenters' Rights. Except
for the consents, approvals, filings and registrations from or
with the Bank Regulatory Authorities referred to in Section 3.04
hereof and compliance with any conditions contained therein, and
the approval of this Agreement by the shareholders of UCB under
the NJBCA, and the approval of the NJDEPE under ISRA, if
necessary, no consents or approvals of, or filings or
registrations with, any public body or authority are necessary,
and no consents or approvals of any third parties are necessary,
or will be, in connection with (a) the execution and delivery of
this Agreement by UCB or the Bank Plan of Merger by UCTC, or
(b) the completion by UCB of the transactions contemplated hereby
or by UCTC of the Bank Merger. UCB has no reason to believe that
any required consents or approvals will not be received or will
be received with conditions, limitations or restrictions
unacceptable to it or which would adversely impact UCB's ability
to complete the transactions contemplated by this Agreement.
Shareholders of UCB are not entitled to dissenters' rights in
connection with the transactions contemplated hereby under
federal or New Jersey law.
Section 2.05 Financial Statements.
(a) UCB has previously delivered, or will
deliver, to Meridian the UCB Regulatory Reports. The UCB
Regulatory Reports have been, or will be, prepared in accordance
with applicable regulatory accounting principles and practices
applied on a consistent basis throughout the periods covered by
such statements, and fairly present, or will fairly present, the
financial position, results of operations and changes in
shareholder's equity of UCB as of and for the periods ended on
the dates thereof, in accordance with applicable regulatory
accounting principles applied on a consistent basis.
(b) UCB has previously delivered to Meridian
the UCB Financials. The UCB Financials have been, or will be,
prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered by such statements, and fairly
present, or will fairly present, the consolidated financial
position, results of operations and cash flows of UCB as of and
for the periods ending on the dates thereof, in accordance with
GAAP applied on a consistent basis.
(c) At the date of each balance sheet included
in the UCB Financials or the UCB Regulatory Reports, neither UCB
nor UCTC nor any other prior banking subsidiary of UCB (as the
case may be) had any liabilities, obligations or loss
contingencies of any nature (whether absolute, accrued,
contingent or otherwise) required to be reflected in such UCB
Financials or UCB Regulatory Reports or in the footnotes thereto
which are not fully reflected or reserved against therein or
fully disclosed in a footnote thereto, except for liabilities,
obligations and loss contingencies which are not material in the
aggregate and except for liabilities, obligations and loss
contingencies which are within the subject matter of a specific
representation and warranty herein and subject, in the case of
any unaudited statements, to normal, recurring audit adjustments
and the absence of footnotes.
Section 2.06 Taxes.
(a) UCB and the UCB Subsidiaries are members
of the same affiliated group within the meaning of IRC
Section 1504(a). UCB has duly filed, and will file, in correct
form all federal, state and local tax returns then required to be
filed by or with respect to UCB and all UCB Subsidiaries on or
prior to the Closing Date (all such returns being accurate and
correct in all material respects) and has duly paid or will pay,
or made or will make, provisions for the payment of all federal,
state and local taxes which have been incurred by or are due or
claimed to be due from UCB and any UCB Subsidiary by any taxing
authority or pursuant to any tax sharing agreement or arrangement
(written or oral) on or prior to the Closing Date other than as
set forth on the UCB Disclosure Schedule or taxes which (i) are
not delinquent or (ii) are being contested in good faith.
(b) No consent pursuant to IRC Section 341(f)
has been filed (or will be filed prior to the Closing Date) by or
with respect to UCB or any UCB Subsidiary.
Section 2.07 No Material Adverse Change.
Except as set forth in the UCB Disclosure Schedule,
UCB has not sustained any Material Adverse Change since March 31,
1995.
Section 2.08 Contracts.
(a) Except as described in UCB's proxy
statement for its 1995 annual meeting of shareholders previously
delivered to Meridian, in the footnotes to the audited
consolidated financial statements of UCB as of December 31, 1994
and 1993 and for the three years ended December 31, 1994, in the
UCB Disclosure Schedule or in Section 2.08(c) or (d), neither UCB
nor any UCB Subsidiary is a party to or subject to: (i) any
employment, consulting or severance contract or arrangement with
any past or present officer, director or employee of UCB or any
UCB Subsidiary, except for "at will" arrangements; (ii) any plan,
arrangement or contract providing for bonuses, pensions, options,
deferred compensation, retirement payments, profit sharing or
similar arrangements for or with any past or present officers,
directors or employees of UCB or any UCB Subsidiary; (iii) any
collective bargaining agreement with any labor union relating to
employees of UCB or any UCB Subsidiary; (iv) any agreement which
by its terms limits the payment of dividends by any UCB
Subsidiary; (v) any instrument evidencing or related to
indebtedness for borrowed money whether directly or indirectly,
by way of purchase money obligation, conditional sale, lease
purchase, guaranty or otherwise, in respect of which UCB or any
UCB Subsidiary is an obligor to any person, which instrument
evidences or relates to indebtedness other than deposits,
repurchase agreements, bankers acceptances and "treasury tax and
loan" accounts established in the ordinary course of business and
transactions in "federal funds"; (vi) any contract (other than
this Agreement) limiting the freedom of any UCB Subsidiary to
engage in any type of banking or bank-related business
permissible under law; or (vii) any contract, plan or arrangement
which provides for payments or benefits in certain circumstances
which, together with other payments or benefits payable to any
participant therein or party thereto, might render any portion of
any such payments or benefits subject to disallowance of
deduction therefor as a result of the application of Section 280G
of the Code.
(b) Except as set forth in the UCB Disclosure
Schedule, true and correct copies of agreements, plans,
arrangements and instruments referred to in Section 2.08(a) or
described in the UCB proxy statement for its 1995 annual meeting
of shareholders or in a footnote to such audited consolidated
financial statements have been or will be provided to Meridian on
or before the date specified in the preamble to this Article II
and are in full force and effect on the date hereof and neither
UCB nor any UCB Subsidiary (nor, to the knowledge of UCB, any
other party to any such contract, plan, arrangement or
instrument) has breached any provision of, or is in default in
any respect under any term of, any such contract, plan,
arrangement or instrument, except where such breach or default is
unlikely to have a Material Adverse Effect on UCB or a material
adverse effect on the assets, business, financial condition or
results of operations of UCTC. Except as set forth in the UCB
Disclosure Schedule, no party to any contract, plan, arrangement
or instrument material to UCB that requires annual payments to
UCB or any UCB subsidiary in excess of $250,000 will have the
right to terminate any or all of the provisions of any such
contract, plan, arrangement or instrument as a result of the
transactions contemplated by this Agreement. Except as set forth
in the UCB Disclosure Schedule, no employee benefit plan,
employment agreement, termination agreement, or similar agreement
or arrangement to which UCB or any UCB Subsidiary is a party or
under which UCB or any UCB Subsidiary may be liable contains
provisions which permit an employee or independent contractor to
terminate it without cause and continue to accrue future benefits
thereunder. Except as set forth in the UCB Disclosure Schedule
or the employment contracts referred to in Section 2.08(c), no
such agreement, plan or arrangement (x) provides for acceleration
in the vesting of benefits or payments due thereunder upon the
occurrence of a change in ownership or control of UCB or any UCB
Subsidiary absent the occurrence of a subsequent event,
(y) provides for benefits which may cause the disallowance of a
federal income tax deduction under IRC Section 280G; or
(z) requires UCB or any UCB Subsidiary to provide a benefit in
the form of UCB Common Stock or determined by reference to the
value of UCB Common Stock.
(c) UCB and UCTC are parties to employment
contracts only with Eugene H. Bauer, Nicholas Frungillo,
Donald S. Nowicki, Robert W. Dowens, Sr., J. Richard Pierce, and
Theodore E. Zuczek. True and correct copies of such contracts
have been delivered to Meridian prior to the execution of this
Agreement and Meridian acknowledges receipt and acceptance
thereof. Such contracts as delivered have not been amended or
modified.
(d) UCTC has negotiated two employment
severance contracts, copies of which contracts have been
delivered to Meridian, and real estate contracts as set forth in
the UCB Disclosure Schedule.
(e) Except as set forth in the UCB Disclosure
Schedule, since December 31, 1994, UCB has not increased the
salary or wages of any employee of UCB or UCTC by more than 5%.
Section 2.09 Ownership of Property; Insurance
Coverage.
(a) UCB and the UCB Subsidiaries have, or will
have as to property acquired after the date hereof, good and, as
to real property, marketable title to all assets and properties
owned by UCB or any UCB Subsidiary in the conduct of their
businesses, whether such assets and properties are real or
personal, tangible or intangible, including assets and property
reflected in the balance sheets contained in the UCB Regulatory
Reports and in the UCB Financials or acquired subsequent thereto
(except to the extent that such assets and properties have been
disposed of for fair value, in the ordinary course of business,
since the date of such balance sheets), subject to no
encumbrances, liens, mortgages, security interests or pledges,
except (i) those items that secure liabilities that are reflected
in such balance sheets or the notes thereto or that secure
liabilities incurred in the ordinary course of business after the
date of the last such balance sheet, (ii) statutory liens for
amounts not yet delinquent or which are being contested in good
faith, (iii) such encumbrances, liens, mortgages, security
interests, pledges and title imperfections that are not in the
aggregate material to the business, operations, assets and
financial condition of UCB and its Subsidiaries taken as a whole,
and (iv) items permitted under Article IV. UCB and the UCB
Subsidiaries, as lessee, have the right under valid and
subsisting leases of real and personal properties used by UCB and
its Subsidiaries in the conduct of their businesses to occupy or
use all such properties as presently occupied and used by each of
them. A list of such existing leases and commitments to lease
and the lease expense and minimum rental commitments with respect
to such leases and lease commitments are set forth in the UCB
Disclosure Schedule.
(b) UCB and the UCB Subsidiaries currently
maintain insurance similar in amounts, scope and coverage to that
maintained by other peer banks and peer bank holding companies.
Except as set forth in the UCB Disclosure Schedule, neither UCB
nor any UCB Subsidiary has received notice from any insurance
carrier that (i) such insurance will be cancelled or that
coverage thereunder will be reduced or eliminated, or
(ii) premium costs with respect to such policies of insurance
will be substantially increased. Except as set forth in the UCB
Disclosure Schedule, there are presently no claims pending under
such policies of insurance and no notices have been given by UCB
or UCTC under such policies. All such insurance is valid and
enforceable and in full force and effect, and within the last
three years UCB has received each type of insurance coverage for
which it has applied and during such periods has not been denied
indemnification for any material claims submitted under any of
its insurance policies, except as set forth in the UCB Disclosure
Schedule.
Section 2.10 Legal Proceedings. Except as set
forth in the UCB Disclosure Schedule, neither UCB nor any UCB
Subsidiary is a party to any, and there are no pending or, to the
best of UCB's knowledge, threatened legal, administrative,
arbitration or other proceedings, claims, actions or governmental
investigations or inquiries of any nature (i) against UCB or any
UCB Subsidiary, (ii) to which UCB or any UCB Subsidiary's assets
are subject, (iii) challenging the validity or propriety of any
of the transactions contemplated by this Agreement, or (iv) which
could adversely affect the ability of UCB to perform under this
Agreement, except for any proceedings, claims, actions,
investigations or inquiries referred to in clauses (i) or (ii)
which, if adversely determined, individually or in the aggregate,
should not be reasonably expected to materially and adversely
affect the assets, business, financial condition or results of
operations of UCB and its Subsidiaries taken as a whole.
Section 2.11 Compliance With Applicable Law.
(a) UCB and the UCB Subsidiaries hold all
licenses, franchises, permits and authorizations necessary for
the lawful conduct of their businesses under, and have complied
in all material respects with, applicable laws, statutes, orders,
rules or regulations of any federal, state or local governmental
authority relating to them, other than where such failure to hold
or such noncompliance will neither result in a limitation in any
material respect on the conduct of their businesses nor otherwise
have a material adverse effect on the assets, business, financial
condition, the results of operations or prospects of UCB and its
Subsidiaries taken as a whole.
(b) Neither UCB nor any UCB Subsidiary has
received any notification or communication from any Bank
Regulatory Authority (i) asserting that UCB or any UCB Subsidiary
is not in substantial compliance with any of the statutes,
regulations or ordinances which such Bank Regulatory Authority
enforces; (ii) threatening to revoke any license, franchise,
permit or governmental authorization which is material to UCB or
any UCB Subsidiary; (iii) requiring or threatening to require UCB
or any UCB Subsidiary, or indicating that UCB or any UCB
Subsidiary may be required, to enter into a cease and desist
order, agreement or memorandum of understanding or any other
agreement restricting or limiting, or purporting to restrict or
limit, in any manner the operations of UCB or any UCB Subsidiary,
including without limitation any restriction on the payment of
dividends; or (iv) directing, restricting or limiting, or
purporting to direct, restrict or limit, in any manner the
operations of UCB or any UCB Subsidiary, including without
limitation any restriction on the payment of dividends (any such
notice, communication, memorandum, agreement or order described
in this sentence herein referred to as a "UCB Regulatory
Agreement"). Neither UCB nor any UCB Subsidiary has consented to
or entered into any UCB Regulatory Agreement, except as
heretofore disclosed to Meridian.
Section 2.12 ERISA. UCB has previously delivered,
or will deliver, to Meridian true and complete copies of all
employee pension benefit plans within the meaning of ERISA
Section 3(2), profit sharing plans, stock purchase plans,
deferred compensation and supplemental income plans, supplemental
executive retirement plans, employment agreements, annual or long
term incentive plans, settlement plans, policies and agreements,
group insurance plans, and all other employee welfare benefit
plans within the meaning of ERISA Section 3(1) (including
vacation pay, sick leave, short-term disability, long-term
disability, and medical plans) and all other employee benefit
plans, policies, agreements and arrangements, all of which are
set forth in the UCB Disclosure Schedule, maintained or
contributed to for the benefit of the employees or former
employees (including retired employees) and any beneficiaries
thereof or directors or former directors of UCB or any UCB
Subsidiary, together with (i) the most recent actuarial (if any)
and financial reports relating to those plans which constitute
"qualified plans" under IRC Section 401(a), (ii) the most recent
annual reports relating to such plans filed by them,
respectively, with any government agency, and (iii) all rulings
and determination letters which pertain to any such plans.
Except as set forth in the UCB Disclosure Schedule, no such plan,
policy, agreement or arrangement has been amended or adopted
since January 1, 1993, except to the extent required by law.
Neither UCB nor any UCB Subsidiary, and no pension plan
maintained by UCB or any UCB Subsidiary, has incurred, directly
or indirectly, any liability under Title IV of ERISA (including
to the Pension Benefit Guaranty Corporation) or to the IRS with
respect to any pension plan qualified under IRC Section 401(a),
except liabilities to the Pension Benefit Guaranty Corporation
pursuant to ERISA Section 4007, all of which have been fully
paid, nor has any reportable event under ERISA Section 4043(b)
occurred with respect to any such pension plan. With respect to
each of such plans that is subject to Title IV of ERISA, the
present value of the accrued benefits under such plan, based upon
the actuarial assumptions used for funding purposes in the plan's
most recent actuarial report, did not, as of its latest valuation
date, exceed the then current value of the assets of such plan
allocable to such accrued benefits. Neither UCB nor any UCB
Subsidiary has incurred or is subject to any liability under
ERISA Section 4201 for a complete or partial withdrawal from a
multi-employer plan. All "employee benefit plans," as defined in
ERISA Section 3(3), comply and, at all times in the past, have
complied in all material respects with (i) relevant provisions of
ERISA and (ii) in the case of plans intended to qualify for
favorable income tax treatment, provisions of the IRC relevant to
such treatment. Except as disclosed in the UCB Disclosure
Schedule, neither UCB nor any UCB Subsidiary has a material
liability under any such plan which pursuant to GAAP is required
to be reflected on or disclosed in (pursuant to a footnote or
otherwise) the UCB Financials and which is not so reflected or
disclosed thereon. To the best knowledge of UCB, except as
disclosed in the UCB Disclosure Schedule, no prohibited
transaction, breach of fiduciary duty or other transaction has
occurred with respect to any employee benefit plan maintained by
UCB or any UCB Subsidiary which would result in the imposition,
directly or indirectly, of an excise tax or other penalty under
ERISA or the IRC. UCB and the UCB Subsidiaries provide
continuation coverage under group health plans for separating
employees and "qualified beneficiaries" in accordance with the
provisions of IRC Section 4980B(f). Such group health plans are
in compliance with Section 1862(b)(1) of the Social Security Act.
Section 2.13 Brokers and Finders. Except for UCB's
engagement of Goldman, Sachs & Co., neither UCB nor any UCB
Subsidiary, nor any of their respective officers, directors,
employees or agents, has employed any broker, finder or financial
advisor, or except for a commitment to pay Goldman, Sachs & Co.,
incurred any liability or commitment for any fees or commissions
to any such person in connection with the transactions
contemplated by this Agreement.
Section 2.14 Environmental Matters. To the
knowledge of UCB, except as set forth in the UCB Disclosure
Schedule, neither UCB nor any UCB Subsidiary, nor any properties
owned or operated by UCB or any UCB Subsidiary has been or is in
violation of or liable under any Environmental Law. There are no
actions, suits or proceedings, or demands, claims, notices or
investigations (including without limitation notices, demand
letters or requests for information from any environmental
agency) instituted or pending, or to the knowledge of UCB,
threatened relating to the liability of any property owned or
operated by UCB or any UCB Subsidiary under any Environmental
Law.
Section 2.15 Loan Portfolio. The allowance for
loan losses reflected, or to be reflected, in the UCB Regulatory
Reports, and shown, or to be shown, on the balance sheets
contained in the UCB Financials were, at the dates of such UCB
Regulatory Reports or UCB Financials, adequate, in accordance
with the requirements of GAAP and all applicable regulatory
criteria. No Bank Regulatory Authority has requested UCB or UCTC
to increase the allowance for loan losses during 1991, 1992, 1993
or 1994 beyond the allowance actually set with respect to such
periods.
Section 2.16 Information to be Supplied. The
information to be supplied by UCB and UCTC for inclusion in the
Registration Statement (including information to be incorporated
by reference therein) will not, at the time the Registration
Statement is declared effective pursuant to the Securities Act,
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein not misleading. The information supplied, or to be
supplied, by UCB for inclusion in the Applications will, at the
time such documents are filed with any Bank Regulatory Authority,
be accurate in all material aspects.
Section 2.17 Securities Documents. UCB has
delivered, or will deliver, to Meridian copies of its (i) annual
reports on SEC Form 10-K for the years ended December 31, 1994,
1993 and 1992, (ii) quarterly reports on SEC Form 10-Q for the
quarters ended March 31, 1995 and March 31, June 30, and
September 30, 1993 and 1994, and (iii) proxy materials used or
for use in connection with its meetings of shareholders held in
1995, 1994 and 1993. At the time of their filing with the SEC,
such reports and such proxy materials complied, in all material
respects, with the Exchange Act and all applicable rules and
regulations of the SEC and did not contain a misstatement or
omission of a material fact.
Section 2.18 Related Party Transactions. Except as
disclosed in the UCB Disclosure Schedule or in the proxy
statement for use in connection with UCB's 1995 annual meeting of
shareholders or in the footnotes to the UCB Financials, UCB is
not a party to any transaction (including any loan or other
credit accommodation) with any director, officer, associate or 5%
shareholder (each, an "Insider") of UCB. All such transactions
(a) were made in the ordinary course of business, (b) were made
on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other Persons, and (c) did not involve more
than the normal risk of collectability or present other
unfavorable features. Except as set forth in the UCB Disclosure
Schedule, no loan or credit accommodation to any Insider of UCB
is presently in default or, during the one-year period prior to
the date of this Agreement, has been in default or has been
restructured, modified or extended. Neither UCB nor UCTC has any
reason to believe that principal and interest with respect to any
such loan or other credit accommodation will not be paid when due
or that the loan grade classification accorded such loan or
credit accommodation by UCTC is inappropriate.
Section 2.19 Investment Banking Opinion. The Board
of Directors of UCB has received an opinion, dated as of the date
of approval of the Merger by the Board, from Goldman, Sachs &
Co., that the Exchange Ratio is fair to the shareholders of UCB
from a financial point of view.
Section 2.20 Antitakeover Provisions Inapplicable.
The provisions of Sections 14A:10A-4 and 14A:10-5 of the NJBCA do
not and will not apply to this agreement or the transactions
contemplated hereby.
Section 2.21 Quality of Representations. No
representations made by UCB in this Agreement contain any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements made not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF MERIDIAN
Meridian hereby represents and warrants to UCB that,
except as specifically set forth herein or in the Meridian
Disclosure Schedule delivered to UCB by Meridian on May 23, 1995:
Section 3.01 Organization.
(a) Meridian is a corporation duly organized,
validly existing and in good standing under the laws of the
Commonwealth of Pennsylvania. Each Meridian Subsidiary is duly
organized, validly existing, and in good standing under the laws
of the jurisdiction of its incorporation and each possesses full
corporate power and authority to carry on its respective business
and to own, lease and operate its properties as presently
conducted. Neither Meridian nor any Meridian Subsidiary is
required by the conduct of its business or the ownership or
leasing of its assets to qualify to do business as a foreign
corporation in any jurisdiction, where the failure to be so
qualified would be material to the assets, business, financial
condition or results of operations of Meridian and its
Subsidiaries taken as a whole. Meridian is a multi-bank holding
company duly registered under the BHC Act.
(b) MBNJ is a bank and trust company, duly
organized and validly existing under the laws of the state of New
Jersey. MBNJ is not a member of the Federal Reserve System.
MBNJ has the corporate power and authority to carry on its
business and operations as now being conducted and to own and
operate the properties and assets now owned and being operated by
it.
(c) There are no Meridian Subsidiaries other
than those identified in the Meridian Disclosure Schedule.
(d) MBNJ is a commercial bank the deposits of
which are insured by the Bank Insurance Fund of the FDIC to the
extent provided in the Federal Deposit Insurance Act.
(e) The respective minute books of Meridian
and MBNJ accurately record, in all material respects, all
material corporate actions of their respective shareholders and
boards of directors (including committees) through the date of
this Agreement.
(f) Prior to the execution of this Agreement,
Meridian has delivered to UCB true and correct copies of the
articles of incorporation and bylaws of Meridian and MBNJ.
Section 3.02 Capital Structure.
(a) As of April 30, 1995, Meridian is
authorized, by its articles of incorporation, to issue
(a) 200,000,000 shares of common stock, par value $5.00 per share
("Meridian Common Stock"), of which 2,469,678 shares are issued
and held by Meridian as treasury stock and 55,847,300 shares are
issued and outstanding, and (b) 25,000,000 shares of preferred
stock, par value $25.00 per share, none of which are issued and
outstanding. Except as set forth in the Meridian Disclosure
Schedule, there has been no change in the shares of authorized,
issued or outstanding shares of Meridian Common Stock. All
shares of Meridian Common Stock issued and outstanding are fully
paid and nonassessable and none were issued in violation of any
preemptive rights. Meridian has no Rights authorized, issued or
outstanding, other than (i) the Meridian Stock Purchase Rights,
(ii) as authorized under the Meridian ESOP and other employee
benefit plans, stock option plan, and dividend reinvestment plan,
and (iii) 500,000 shares of Meridian Common Stock issuable to
former shareholders of McGlinn Capital Management, Inc. Since
December 31, 1993, Meridian has repurchased (i) 2,240,738 shares
of Meridian Common Stock for issuance in connection with
Meridian's employee benefit plans, stock option plan and dividend
reinvestment plan and (ii) 500,000 shares in connection with
providing for the McGlinn acquisition. As of April 30, 1995,
Meridian had approximately 27,000 shareholders of record. The
Meridian Disclosure Schedule lists the timing and number of
purchases of Meridian Common Stock by the Meridian ESOP and other
employee benefit plans, stock option plan and dividend
reinvestment plan between January 1, 1994 and the date of this
Agreement.
(b) No Person is known to Meridian to be the
beneficial owner (as defined in Section 13(d) of the Exchange
Act) of 5% or more of the outstanding shares of Meridian Common
Stock, except as disclosed in Meridian's proxy statement used in
connection with its 1995 annual meeting of shareholders,
previously delivered to UCB.
(c) Meridian owns all of the capital stock of
Meridian Bank, Delaware Trust Company, and MBNJ free and clear of
any lien or encumbrance. Neither (i) Meridian nor, (ii) MBNJ nor
(iii) any other Meridian Subsidiary owns any equity interest,
directly or indirectly, in any other company, except for equity
interests identified on the Meridian Disclosure Schedule, equity
interests identified pursuant to Section 3.01(c) hereof, equity
interests held in the investment portfolios of Meridian or
Meridian Subsidiaries, equity interests held by Meridian
Subsidiaries in a fiduciary capacity and equity interests held in
connection with the commercial loan and ancillary real estate
activities of Meridian Subsidiaries. As used in this paragraph,
"equity interests" include any subscriptions, options, warrants,
calls, commitments, agreements or other Rights.
(d) The authorized capital stock of MBNJ
consists of (a) 6,000,000 shares of common stock, par value $5.00
per share, of which, no shares are held by MBNJ as treasury stock
and 1,000,000 shares were issued and outstanding and
(b) 25,000,000 shares of preferred stock, par value $25.00 per
share, none of which are issued and outstanding. All shares of
capital stock of MBNJ issued and outstanding are fully paid and
nonassessable and owned by Meridian, and none were issued in
violation of any preemptive rights. MBNJ has no Rights
authorized, issued or outstanding.
Section 3.03 Authority; No Violation.
(a) Meridian has full corporate power and
authority to execute and deliver this Agreement and to consummate
the transactions contemplated hereby. MBNJ has full corporate
power and authority to execute and deliver the Bank Plan of
Merger and to complete the Bank Merger. The execution and
delivery of this Agreement by Meridian and the completion by
Meridian of the transactions contemplated hereby have been duly
and validly approved by the Board of Directors of Meridian and,
except for approval by the shareholders of Meridian under NASD
rules applicable to it, no other corporate proceedings on the
part of Meridian are necessary to complete the transactions
contemplated hereby. The execution and delivery of the Bank Plan
of Merger by MBNJ and the completion by MBNJ of the Bank Merger
have been duly and validly approved by the Board of Directors of
MBNJ and by Meridian as sole shareholder of MBNJ, and no other
corporate proceedings on the part of MBNJ are necessary to
consummate the transactions contemplated by the Bank Plan of
Merger. This Agreement has been duly and validly executed and
delivered by Meridian and, subject to approval by the
shareholders of Meridian under the rules of the NASD applicable
to it, and receipt of the required approvals of Regulatory
Authorities described in Section 3.04 hereof, constitutes the
valid and binding obligation of Meridian, enforceable against
Meridian in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors'
rights generally and subject, as to enforceability, to general
principles of equity. The Bank Plan of Merger, upon its
execution and delivery by MBNJ concurrently with the execution
and delivery of this Agreement, will constitute the valid and
binding obligation of MBNJ, enforceable against MBNJ in
accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally
and subject, as to enforceability, to general principles of
equity.
(b) (A) The execution and delivery of this
Agreement by Meridian, (B) the execution and delivery of the Bank
Plan of Merger by MBNJ, (C) subject to receipt of approvals from
the Regulatory Authorities referred to in Section 3.04 hereof and
UCB's and Meridian's compliance with any conditions contained
therein, the consummation of the transactions contemplated
hereby, and (D) compliance by Meridian or MBNJ with any of the
terms or provisions hereof or of the Bank Plan of Merger will not
(i) conflict with or result in a breach of any provision of the
articles of incorporation or bylaws of Meridian or MBNJ;
(ii) violate any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to
Meridian or MBNJ or any of their respective properties or assets;
or (iii) violate, conflict with, result in a breach of any
provisions of, constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default),
under, result in the termination of, accelerate the performance
required by, or result in a right of termination or acceleration
or the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of Meridian or
MBNJ under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other investment or obligation to which Meridian or
is a party, or by which they or any of their respective
properties or assets may be bound or affected, except for such
violations, conflicts, breaches or defaults under clause (ii) or
(iii) hereof which, either individually or in the aggregate, will
not have a material adverse effect on Meridian or a material
adverse effect on Meridian's ability to perform hereunder.
Section 3.04 Consents. Except for the consents,
approvals, filings and registrations with the FRB, the FDIC, the
NJDB, the PDB, the SEC, and state "blue sky" authorities and
compliance with any conditions contained therein, and the
approval of this Agreement by the shareholders of Meridian under
the rules of the NASD and of the Bank Plan of Merger by Meridian
as the sole shareholder of MBNJ, no consents or approvals of, or
filings or registrations with, any public body or authority are
necessary, and no consents or approvals of any third parties are
necessary, or will be, in connection with (a) the execution and
delivery of this Agreement by Meridian or the Bank Plan of Merger
by MBNJ, or (b) the completion by Meridian of the transactions
contemplated hereby or by MBNJ of the Bank Merger. Meridian has
no reason to believe that any required consents or approvals will
not be received or will be received with conditions, limitations
or restrictions unacceptable to it or which would adversely
impact Meridian's ability to complete the transactions
contemplated by this Agreement.
Section 3.05 Financial Statements.
(a) Meridian has previously delivered, or will
deliver, to UCB the Meridian Regulatory Reports. The Meridian
Regulatory Reports have been, or will be, prepared in accordance
with applicable regulatory accounting principles and practices
applied on a consistent basis throughout the periods covered by
such statements, and fairly present, or will fairly present, the
financial position, results of operations and changes in
shareholders' equity of Meridian as of and for the periods ended
on the dates thereof, in accordance with applicable regulatory
accounting principles applied on a consistent basis.
(b) Meridian has previously delivered, or will
deliver, to UCB the Meridian Financials. The Meridian Financials
have been, or will be, prepared in accordance with GAAP applied
on a consistent basis throughout the periods covered by such
statements, and fairly present, or will fairly present, the
consolidated financial position, results of operations and cash
flows of Meridian as of and for the periods ending on the dates
thereof, in accordance with GAAP applied on a consistent basis.
(c) At the date of any balance sheet included
in the Meridian Financials, Meridian did not have any liabilities
or obligations of any nature (whether absolute, accrued,
contingent or otherwise) of a type required to be reflected in
such Meridian Financials or in the footnotes thereto which are
not fully reflected or reserved against therein or disclosed in a
footnote thereto, except for liabilities and obligations which
are not material in the aggregate and which are incurred in the
ordinary course of business, consistent with past practice, and
except for liabilities and obligations which are within the
subject matter of a specific representation and warranty herein
and subject, in the case of any unaudited statements, to normal,
recurring adjustments and the absence of footnotes.
Section 3.06 Taxes.
(a) Meridian and the Meridian Subsidiaries are
members of the same affiliated group within the meaning of IRC
Section 1504(a). Meridian has duly filed, and will file, in
correct form all federal, state and local tax returns then
required to be filed by or with respect to Meridian and all
Meridian Subsidiaries on or prior to the Closing Date (all such
returns being accurate and correct in all material respects) and
has duly paid or will pay, or made or will make, provisions for
the payment of all federal, state and local taxes which have been
incurred by or are due or claimed to be due from Meridian and any
Meridian Subsidiary by any taxing authority or pursuant to any
tax sharing agreement or arrangement (written or oral) on or
prior to the Closing Date other than taxes which (i) are not
delinquent or (ii) are being contested in good faith.
(b) No consent pursuant to IRC Section 341(f)
has been filed (or will be filed prior to the Closing Date) by or
with respect to Meridian or any Meridian Subsidiary.
Section 3.07 No Material Adverse Change. Except as
set forth in the Meridian Disclosure Schedule, Meridian has not
suffered any Material Adverse Change since March 31, 1995.
Section 3.08 Contracts.
(a) Except as described in Meridian's proxy
statement for its 1995 annual meeting of shareholders previously
delivered to UCB, in the footnotes to the audited consolidated
financial statements of Meridian as of December 31, 1994 and 1993
and for the three years ended December 31, 1994, in the Meridian
Disclosure Schedule or in Section 3.08(c) or (d), neither
Meridian nor any Meridian Subsidiary is a party to or subject to:
(i) any employment, consulting or severance contract or
arrangement with any named executive officer identified in the
Compensation Table included in Meridian's proxy statement used in
connection with its 1995 annual meetings of shareholders, except
for "at will" arrangements; (ii) any plan, arrangement or
contract providing for bonuses, pensions, options, deferred
compensation, retirement payments, profit sharing or similar
arrangements for or with any named executive officer identified
in the Compensation Table included in Meridian's proxy statement
used in connection with its 1995 annual meeting of shareholders;
(iii) any collective bargaining agreement with any labor union
relating to employees of Meridian or any Meridian Subsidiary;
(iv) any agreement which by its terms limits the payment of
dividends by any Meridian Subsidiary; or (v) any contract (other
than this Agreement) limiting the freedom of any Meridian
Subsidiary to engage in any type of banking or bank-related
business permissible under law.
(b) The agreements, plans, arrangements and
instruments referred to in Section 3.08(a) or described in
Meridian's proxy statement for its 1995 annual meeting of
shareholders or in a footnote to Meridian's audited consolidated
financial statements are in full force and effect on the date
hereof and neither Meridian nor any Meridian Subsidiary (nor, to
the knowledge of Meridian, any other party to any such contract,
plan, arrangement or instrument) has breached any provision of,
or is in default in any respect under any term of, any such
contract, plan, arrangement or instrument. Except as set forth
in the Meridian Disclosure Schedule or in Meridian's Proxy
Statement for its 1995 meeting of shareholders, no party to any
material contract, plan, arrangement or instrument that requires
annual payments in excess of $250,000 will have the right to
terminate any or all of the provisions of any such contract,
plan, arrangement or instrument as a result of the transactions
contemplated by this Agreement and none of the employees of
Meridian or any Meridian Subsidiary possess the right to
terminate their employment as a result of the execution of this
Agreement. Except as set forth in the Meridian Disclosure
Schedule or in Meridian's proxy statement for its 1995 meeting of
shareholders, no plan, employment agreement, termination
agreement, or similar agreement or arrangement to which Meridian
or any Meridian Subsidiary is a party or under which Meridian or
any Meridian Subsidiary may be liable contains provisions which
permit an employee or independent contractor to terminate it
without cause and continue to accrue future benefits thereunder.
Section 3.09 Ownership of Property; Insurance
Coverage.
(a) Meridian and the Meridian Subsidiaries
have, or will have as to property acquired after the date hereof,
good and, as to real property, marketable title to all assets and
properties owned by Meridian or any Meridian Subsidiary in the
conduct of their businesses, whether such assets and properties
are real or personal, tangible or intangible, including assets
and property reflected in the balance sheets contained in the
Meridian Regulatory Reports and in the Meridian Financials or
acquired subsequent thereto (except to the extent that such
assets and properties have been disposed of for fair value, in
the ordinary course of business, since the date of such balance
sheets). Meridian and the Meridian Subsidiaries, as lessee, have
the right under valid and subsisting leases of real and personal
properties used by Meridian and its Subsidiaries in the conduct
of their businesses to occupy or use all such properties as
presently occupied and used by each of them.
(b) Meridian and the Meridian Subsidiaries
currently maintain insurance similar in amounts, scope and
coverage to that maintained by other peer banks and peer bank
holding companies. All such insurance is valid and enforceable
and in full force and effect, and within the last three years
Meridian has received each type of insurance coverage for which
it has applied and during such periods has not been denied
indemnification for any material claims submitted under any of
its insurance policies, except as set forth on the Meridian
Disclosure Schedule.
Section 3.10 Legal Proceedings. Except as
disclosed in the Meridian Disclosure Schedule, neither Meridian
nor any Meridian Subsidiary is a party to any, and there are no
pending or, to the best of Meridian's knowledge, threatened
legal, administrative, arbitration or other proceedings, claims,
actions or governmental investigations or inquiries of any nature
(i) against Meridian or any Meridian Subsidiary, (ii) to which
Meridian's or any Meridian Subsidiary's assets are subject,
(iii) challenging the validity or propriety of any of the
transactions contemplated by this Agreement, or (iv) which could
adversely affect the ability of Meridian to perform under this
Agreement, except for any proceedings, claims, actions,
investigations or inquiries referred to in clauses (i) or (ii)
which, if adversely determined, individually or in the aggregate,
should not be reasonably expected to materially and adversely
affect the assets, business, financial condition or results of
operations of Meridian and its Subsidiaries taken as a whole.
Section 3.11 Compliance With Applicable Law.
(a) Meridian and the Meridian Subsidiaries
hold all licenses, franchises, permits and authorizations
necessary for the lawful conduct of their businesses under, and
have complied in all material respects with, applicable laws,
statutes, orders, rules or regulations of any federal, state or
local governmental authority relating to them, other than where
such failure to hold or such noncompliance will neither result in
a limitation in any material respect on the conduct of their
businesses nor otherwise have a material adverse effect on the
assets, business, financial condition or results of operations of
Meridian and its Subsidiaries taken as a whole.
(b) Except as set forth in the Meridian
Disclosure Schedule, neither Meridian nor any Meridian Subsidiary
has received any notification or communication from any
Regulatory Authority or the SEC or any state securities law
regulatory authority (i) asserting that Meridian or any Meridian
Subsidiary is not in substantial compliance with any of the
statutes, regulations or ordinances which such Bank Regulatory
Authority enforces; (ii) threatening to revoke any license,
franchise, permit or governmental authorization which is material
to Meridian or any Meridian Subsidiary; (iii) requiring or
threatening to require Meridian or any Meridian Subsidiary, or
indicating that Meridian or any Meridian Subsidiary may be
required, to enter into a cease and desist order, agreement or
memorandum of understanding or any other agreement restricting or
limiting, or purporting to restrict or limit, in any manner the
operations of Meridian or any Meridian Subsidiary, including
without limitation any restriction on the payment of dividends;
or (iv) directing, restricting or limiting, or purporting to
direct, restrict or limit, in any manner the operations of
Meridian or any Meridian Subsidiary, including without limitation
any restriction on the payment of dividends (any such notice,
communication, memorandum, agreement or order described in this
sentence herein referred to as a "Meridian Regulatory
Agreement"). Neither Meridian nor any Meridian Subsidiary has
consented to or entered into any Meridian Regulatory Agreement,
except as heretofore disclosed to UCB.
Section 3.12 ERISA. Neither Meridian nor any
Meridian Subsidiary, and no pension plan maintained by Meridian
or any Meridian Subsidiary, has incurred, directly or indirectly,
any liability under Title IV of ERISA (including to the Pension
Benefit Guaranty Corporation) or to the IRS with respect to any
pension plan qualified under IRC Section 401(a), except
liabilities to the Pension Benefit Guaranty Corporation pursuant
to ERISA Section 4007, all of which have been fully paid, nor has
any reportable event under ERISA Section 4043(b) occurred with
respect to any such pension plan. With respect to each of such
plans that is subject to Title IV of ERISA, the present value of
the accrued benefits under such plan, based upon the actuarial
assumptions used for funding purposes in the plan's most recent
actuarial report, did not, as of its latest valuation date,
exceed the then current value of the assets of such plan
allocable to such accrued benefits. Neither Meridian nor any
Meridian Subsidiary has incurred or is subject to any liability
under ERISA Section 4201 for a complete or partial withdrawal
from a multi-employer plan. All "employee benefit plans," as
defined in ERISA Section 3(3), comply and, at all times in the
past, have complied in all material respects with (i) relevant
provisions of ERISA and (ii) in the case of plans intended to
qualify for favorable income tax treatment, provisions of the IRC
relevant to such treatment. Except as disclosed in the Meridian
Disclosure Schedule, neither Meridian nor any Meridian Subsidiary
has a material liability under any such plan which pursuant to
GAAP is required to be reflected on or disclosed in (pursuant to
a footnote or otherwise) the Meridian Financials and which is not
so reflected or disclosed thereon. To the best knowledge of
Meridian, except as disclosed in the Meridian Disclosure
Schedule, no prohibited transaction, breach of fiduciary duty or
other transaction has occurred with respect to any employee
benefit plan maintained by Meridian or any Meridian Subsidiary
which would result in the imposition, directly or indirectly, of
an excise tax or other penalty under ERISA or the IRC. Meridian
and the Meridian Subsidiaries provide continuation coverage under
group health plans for separating employees and "qualified
beneficiaries" in accordance with the provisions of IRC
Section 4980B(f). Such group health plans are in compliance with
Section 1862(b)(1) of the Social Security Act.
Section 3.13 Brokers and Finders. Except for
Meridian's engagement of Keefe, Bruyette & Woods, Inc. and Lehman
Brothers, Inc., neither Meridian nor any Meridian Subsidiary, nor
any of their respective officers, directors, employees or agents,
has employed any broker, finder or financial advisor, or except
for commitments to pay Keefe, Bruyette & Woods, Inc. and Lehman
Brothers, Inc., incurred any liability or commitment for any fees
or commissions to any such person in connection with the
transactions contemplated by this Agreement.
Section 3.14 Environmental Matters. To the
knowledge of Meridian, except as set forth on the Meridian
Disclosure Schedule, neither Meridian nor any Meridian
Subsidiary, nor any properties owned or operated by Meridian or
any Meridian Subsidiary has been or is in violation of or liable
under any Environmental Law. Except as set forth on the Meridian
Disclosure Schedule, there are no actions, suits or proceedings,
or demands, claims, notices or investigations (including without
limitation notices, demand letters or requests for information
from any environmental agency) instituted or pending, or to the
knowledge of Meridian, threatened relating to the liability of
any property owned or operated by Meridian or any Meridian
Subsidiary under any Environmental Law.
Section 3.15 Loan Portfolio. The allowance for
loan losses reflected, or to be reflected, in the Meridian
Regulatory Reports, and shown, or to be shown, on the balance
sheets contained in the Meridian Financials were, at the dates of
such Meridian Regulatory Reports or Meridian Financials,
adequate, in accordance with the requirements of GAAP and all
applicable regulatory criteria. No Regulatory Authority has
requested Meridian or any Meridian Subsidiary to increase its
allowance for loan losses during 1991, 1992, 1993 or 1994 beyond
the allowance actually set with respect to such periods.
Section 3.16 Information to be Supplied. The
information to be supplied by Meridian for inclusion in the
Registration Statement (including information to be incorporated
by reference therein) will not, at the time the Registration
Statement is declared effective pursuant to the Securities Act,
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein not misleading. The Registration Statement will comply,
in all material respects, as to form with the requirements of the
Securities Act. The information supplied, or to be supplied, by
Meridian for inclusion in the Applications will, at the time such
documents are filed with any Bank Regulatory Authority, be
accurate in all material aspects.
Section 3.17 Securities Documents. Meridian has
delivered, or will deliver, to UCB copies of its (i) annual
reports on SEC Form 10-K for the years ended December 31, 1994,
1993, and 1992, (ii) quarterly reports on SEC Form 10-Q for the
quarters ended March 31, 1995 and March 31, June 30, and
September 30, 1993 and 1994, and (iii) proxy materials used in
connection with its annual meeting of shareholders held in April
1995. At the time of their filing with the SEC, such reports and
such proxy materials complied, in all material respects, with the
Exchange Act and the applicable rules and regulations of the SEC
and did not contain an untrue statement or omission of a material
fact.
Section 3.18 Related Party Transactions. Except as
disclosed in the Meridian Disclosure Schedule or the proxy
statement for use in connection with Meridian's 1995 annual
meeting of shareholders or in the footnotes to the Meridian
Financials, Meridian is not a party to any transaction (including
any loan or other credit accommodation) with any director,
officer, associate or 5% shareholder (each an "Insider") of
Meridian (except a Meridian Subsidiary). All such transactions
(a) were made in the ordinary course of business, (b) were made
on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other Persons, and (c) did not involve more
than the normal risk of collectability or present other
unfavorable features. Except as set forth on the Meridian
Disclosure Schedule, no loan or credit accommodation to any
Insider of Meridian is presently in default or, during the three-
year period prior to the date of this Agreement, has been in
default or has been restructured, modified or extended. Neither
Meridian nor any Meridian Subsidiary has any reason to believe
that principal and interest with respect to any such loan or
other credit accommodation will not be paid when due or that the
loan grade classification accorded such loan or credit
accommodation by any Meridian Subsidiary is inappropriate.
Section 3.19 Investment Banking Opinion. Meridian
has received an opinion from Lehman Brothers, Inc. to the effect
that the transaction is fair to Meridian from a financial point
of view.
Section 3.20 Quality of Representations. No
representation made by Meridian in this Agreement contains any
untrue statement of a material fact or omits to state a material
fact necessary to make the statements made not misleading.
ARTICLE IV
COVENANTS OF THE PARTIES
Section 4.01 Conduct of UCB's Business.
(a) From the date of this Agreement to the
Closing Date, UCB and each UCB Subsidiary will conduct its
business and engage in transactions, including extensions of
credit and pricing deposit liabilities, only in the ordinary
course and consistent with past practice and policies, except as
otherwise required or permitted by this Agreement, as set forth
in the UCB Disclosure Schedule or with the written consent of
Meridian. UCB will use its best efforts, and will cause UCTC to
use its best efforts, to (i) preserve its business organizations
intact, (ii) maintain good relationships with employees, and
(iii) preserve for itself the good will of customers of UCB and
UCB Subsidiaries and others with whom business relationships
exist. From the date hereof to the Closing Date, except as
otherwise consented to or approved by Meridian in writing or as
permitted or required by this Agreement, UCB will not, and UCB
will not permit any UCB Subsidiary to:
(i) change any provision of its articles
of incorporation or bylaws;
(ii) change the number of authorized or
issued shares of its capital stock or issue or grant any
option, warrant, call, commitment, subscription, Right or
agreement of any character relating to its authorized or
issued capital stock or any securities convertible into
shares of such stock, or split, combine or reclassify any
shares of capital stock, or declare, set aside or pay any
dividend or other distribution in respect of capital
stock, or redeem or otherwise acquire any shares of
capital stock except that UCB may continue to declare and
pay regular quarterly cash dividends on March 1, June 1,
September 1, and December 1 of each year, not to exceed
$1.85 per share of UCB Common Stock outstanding, provided
that each of Meridian and UCB shall have received from
KPMG Peat Marwick a letter reasonably satisfactory to
each of them to that effect that the payment of any such
dividend would not prevent Meridian from accounting for
the Merger as a pooling of interests. Notwithstanding
the foregoing, UCB shall not, without the prior written
consent of Meridian, declare or pay any such cash
dividend on shares of UCB Common Stock in or for any
calendar quarter in which Meridian reasonably anticipates
that the Effective Date will occur on or prior to the
record date for the payment by Meridian, during such
quarter, of a regular cash dividend on shares of Meridian
Common Stock;
(iii) except as set forth on the UCB
Disclosure Schedule, grant any severance or termination
pay (other than pursuant to written policies or written
agreements of UCB or UCB Subsidiaries in effect on the
date hereof and provided to Meridian prior to the date
hereof) to, or enter into or amend any employment
agreement with, or increase the compensation of, any
employee, officer or director of UCB or any UCB
Subsidiary, except for routine periodic increases,
individually and in the aggregate, in accordance with
past practice;
(iv) except as set forth on the UCB
Disclosure Schedule, merge or consolidate UCB or any UCB
Subsidiary with any other corporation; sell or lease all
or any substantial portion of the assets or business of
UCB or any UCB Subsidiary; make any acquisition of all or
any substantial portion of the business or assets of any
other person, firm, association, corporation or business
organization other than in connection with the collection
of any loan or credit arrangement between any UCB
Subsidiary and any other person; enter into a purchase
and assumption transaction with respect to deposits and
liabilities; permit the revocation or surrender by any
UCB Subsidiary of its certificate of authority to
maintain, or file an application for the relocation of,
any existing branch office, or file an application for a
certificate of authority to establish a new branch
office;
(v) except as set forth in the UCB
Disclosure Schedule, sell or otherwise dispose of the
capital stock of UCTC or sell or otherwise dispose of any
asset of UCB or of any UCB Subsidiary other than in the
ordinary course of business consistent with past
practice; subject any asset of UCB or of any UCB
Subsidiary to a lien, pledge, security interest or other
encumbrance (other than in connection with deposits,
repurchase agreements, bankers acceptances, "treasury tax
and loan" accounts established in the ordinary course of
business and transactions in "federal funds" and the
satisfaction of legal requirements in the exercise of
trust powers) other than in the ordinary course of
business consistent with past practice; modify in any
material manner the manner in which UCB or any UCB
Subsidiary has heretofore conducted its business or enter
into any new line of business; incur any indebtedness for
borrowed money (or guarantee any indebtedness for
borrowed money), except in the ordinary course of
business consistent with past practice; provided,
however, that UCTC may undertake the activities listed on
the UCB Disclosure Schedule;
(vi) take any action which would result
in any of the representations and warranties of UCB set
forth in this Agreement becoming untrue as of the Closing
Date or in any of the conditions set forth in Article V
hereof not being satisfied;
(vii) change any method, practice or
principle of accounting except for implementation of SFAS
No. 112, SFAS No. 114 and SFAS No. 115 and any new SFAS
standard;
(viii) waive, release, grant or transfer
any rights of value or modify or change in any material
respect any existing agreement to which UCB or any UCB
Subsidiary is a party, other than in the ordinary course
of business, consistent with past practice;
(ix) except as set forth in the UCB
Disclosure Schedule, implement any pension, retirement,
profit sharing, bonus, welfare benefit or similar plan or
arrangement that was not in effect on the date of this
Agreement, or amend any existing plan or arrangement
except to the extent such amendments do not result in an
increase in cost or are required by law or are
contemplated hereunder;
(x) compromise, extend or restructure any
loan with an unpaid principal balance exceeding
$1 million individually or $10 million in the aggregate,
except as set forth in the UCB Disclosure Schedule;
(xi) except in accordance with UCB
policies existing on November 1, 1994 (as the same may be
amended with the consent of Meridian), and except
consistent with UCB's practices on November 1, 1994 (as
the same may be changed with the consent of Meridian),
sell, exchange or otherwise dispose of any investment
securities or loans that are held for sale, prior to
scheduled maturity;
(xii) except in accordance with UCB
policies existing on November 1, 1994 (as the same may be
amended with the consent of Meridian), and except
consistent with UCB's practices existing on November 1,
1994 (as the same may be changed with the consent of
Meridian), purchase any security for its investment
portfolio;
(xiii) purchase or sell, exchange or
otherwise dispose of any investment securities which
would result in the creation of undue risk with respect
to such portfolio or sell or otherwise dispose of any
equity securities included in the investment portfolio;
(xiv) except as set forth in the UCB
Disclosure Schedule and consistent with prudent banking
practice and UCB's current underwriting standards, make
or modify any loan or other credit facility commitment;
(xv) except as set forth in the UCB
Disclosure Schedule and consistent with past practice,
enter into, renew, extend or modify any other transaction
with any Affiliate;
(xvi) enter into any swap or similar
commitment, agreement or arrangement;
(xvii) take any further action (other
than continuation of employment in accordance with past
practice) that would give rise to a right of payment to
any individual under any employment agreement or any
bonus or performance award arrangement;
(xviii) take any action that UCB knows
would preclude satisfaction of the condition to closing
contained in Section 5.02(k) relating to financial
accounting treatment of the Merger;
(xix) amend its articles of
incorporation, charter or bylaws or permit the amendment
of the articles of incorporation, charter or bylaws of
any UCB Subsidiary;
(xx) materially change its interest rate
composition for purposes of asset/liability management or
manage its interest rate risk otherwise than consistent
with past practice; or
(xxi) agree to do any of the foregoing.
For purposes of this Section 4.01, it shall not be
considered in the ordinary course of business for UCB or any UCB
Subsidiary to do any of the following: (i) make any capital
expenditures of more than $1,000,000 in any calendar year in the
aggregate, without the prior written consent of Meridian;
(ii) except as set forth in the UCB Disclosure Schedule, make any
sale, assignment, transfer, pledge, hypothecation or other
disposition of any assets having a book or market value,
whichever is greater, in the aggregate, in excess of $1,000,000,
other than a pledge of assets to secure government deposits, the
exercise of trust powers, sale of assets received in satisfaction
of debts previously contracted in the normal course of business,
issuance of loans, or transactions in investment securities by a
UCB Subsidiary or repurchase agreements made, in each case, in
the ordinary course of business; (iii) undertake or enter any
lease, contract or other commitment for its account, other than
in the normal course of providing credit to customers as part of
its banking business, involving a payment by UCB or any UCB
Subsidiary in excess of $1,000,000 or a payment to an affiliate
of UCB or containing a material financial commitment and
extending beyond 12 months from the date hereof; or (iv) initiate
or implement any loan marketing programs at other than market
rates.
Section 4.02 Access; Confidentiality.
(a) From the date of this Agreement through
the Closing Date, UCB shall afford to, and shall cause each UCB
Subsidiary to afford to, Meridian and its authorized agents and
representatives, complete access to its respective properties,
assets, books and records and personnel, at reasonable hours and
after reasonable notice; and the officers of UCB will furnish any
person making such investigation on behalf of Meridian with such
financial and operating data and other information with respect
to the businesses, properties, assets, books and records and
personnel as Meridian shall from time to time reasonably request.
(b) During the 30 day period immediately prior
to the estimated Closing Date under this Agreement, Meridian
shall afford to, and shall cause each Meridian Subsidiary to
afford to, UCB and its authorized agents and representatives,
continuing access to Meridian's properties, assets, books and
records and personnel, at reasonable hours and after reasonable
notice. Such due diligence shall be consistent in scope to the
due diligence conducted by UCB in connection with the execution
of this Agreement.
(c) UCB and Meridian each agree to conduct
such investigation and discussions hereunder in a manner so as
not to interfere unreasonably with normal operations and customer
and employee relationships of the other party.
(d) If the transactions contemplated by this
Agreement shall not be consummated, UCB and Meridian will each
destroy or return all documents and records obtained from the
other party or its representatives, during the course of its
investigation and will cause all information with respect to the
other party obtained pursuant to this Agreement or preliminarily
thereto to be kept confidential, except to the extent such
information becomes public through no fault of the party to whom
the information was provided or any of its representatives or
agents and except to the extent disclosure of any such
information is legally required. UCB and Meridian shall each
give prompt notice to the other party of any contemplated
disclosure where such disclosure is so legally required.
(e) UCB and Meridian each agree not to hire
the other's employees during the term of this Agreement, and if
this Agreement terminates, for a period of six months thereafter.
(f) Meridian shall permit for a period of
2 years after Closing access to the minute books of UCTC and its
affiliates for purposes of historical research.
Section 4.03 Regulatory Matters and Consents.
(a) Meridian will prepare all Applications and
make all filings for, and use their best efforts to obtain as
promptly as practicable after the date hereof, all necessary
permits, consents, approvals, waivers and authorizations of all
Bank Regulatory Authorities necessary or advisable to complete
the transactions contemplated by this Agreement.
(b) UCB will furnish Meridian with all
information concerning UCB and UCB Subsidiaries as may be
necessary in connection with any Application or filing made by or
on behalf of Meridian to any Regulatory Authority in connection
with the transactions contemplated by this Agreement as promptly
as practicable.
(c) Meridian will promptly furnish UCB with
copies of written communications to, or received by Meridian or
any Meridian Subsidiary from, any Regulatory Authority in respect
of the transactions contemplated hereby.
(d) UCB will cooperate with Meridian in the
foregoing matters and will furnish Meridian with all information
concerning UCB and UCB Subsidiaries as may be necessary in
connection with any Application or filing (including the
Registration Statement and any report filed with the SEC) made by
or on behalf of Meridian to any Regulatory Authority in
connection with the transactions contemplated by this Agreement,
and such information will be accurate and complete in all
material respects. In connection therewith, UCB will provide
certificates and other documents reasonably requested by
Meridian.
Section 4.04 Taking of Necessary Action.
(a) Meridian and UCB shall each use its best
efforts in good faith, and each of them shall cause its
Subsidiaries to use their best efforts in good faith, to
(i) furnish such information as may be required in connection
with the preparation of the documents referred to in Section 4.03
of this Agreement and (ii) take or cause to be taken all action
necessary or desirable on its part so as to permit completion of
the Merger and the Bank Merger at the earliest possible date,
including, without limitation, (1) obtaining the consent or
approval of each Person whose consent or approval is required for
consummation of the transactions contemplated hereby, provided
that neither UCB nor any UCB Subsidiary shall agree to make any
payments or modifications to agreements in connection therewith
without the prior written consent of Meridian and (2) requesting
the delivery of appropriate opinions, consents and letters from
its counsel and independent auditors. No party hereto shall
take, or cause, or to the best of its ability permit to be taken,
any action that would substantially impair the prospects of
completing the Merger and the Bank Merger pursuant to this
Agreement and the Bank Plan of Merger; provided that nothing
herein contained shall preclude Meridian or UCB or from
exercising its rights under this Agreement or the Option
Agreement.
(b) UCB and Meridian shall prepare a
Prospectus/Proxy Statement to be mailed to shareholders of UCB in
connection with the meeting of UCB shareholders and transactions
contemplated hereby and to be filed by Meridian with the SEC in
the Registration Statement, which Prospectus/Proxy statement
shall conform in the reasonable judgment of Meridian and UCB and
their respective counsel to all applicable legal requirements.
Meridian shall, as promptly as practicable following the
preparation thereof, in a form consented to by both Meridian and
UCB, file the Registration Statement with the SEC and UCB and
Meridian shall use all reasonable efforts to have the
Registration Statement declared effective under the Securities
Act as promptly as practicable after such filing. Meridian will
advise UCB, promptly after Meridian receives notice thereof, of
the time when the Registration Statement has become effective or
any supplement or amendment has been filed, of the issuance of
any stop order or the suspension of the qualification of the
shares of capital stock issuable pursuant to the Registration
Statement, or the initiation or threat of any proceeding for any
such purpose, or of any request by the SEC for the amendment or
supplement of the Registration Statement or for additional
information. Meridian shall use its best efforts to obtain,
prior to the effective date of the Registration Statement, all
necessary state securities laws or "Blue Sky" permits and
approvals required to carry out the transactions contemplated by
this Agreement.
Section 4.05 Certain Agreements.
(a) Subject to Section 4.13 hereof, as soon as
practicable after the Effective Date, all employees of UCB and
UCB Subsidiaries whose employment is continued shall be employed
upon their existing terms and conditions, provided that this
Section 4.05(a) shall not be construed (i) to limit the ability
of Meridian and Meridian Subsidiaries to terminate the employment
of any employee or to review and adjust employee salary levels
and employee benefit programs from time to time and to make such
changes as they deem appropriate, (ii) to require Meridian or any
Meridian Subsidiaries to provide employees or former employees
with any specific benefits, or (iii) to constitute UCB employees
or former employees as third party beneficiaries of this
Section 4.05(a).
(b) For a period of six years from and after
the Effective Date, Meridian shall indemnify, and advance
expenses in matters that may be subject to indemnification to,
persons who served as directors and officers of UCB or any UCB
Subsidiary on or before the Effective Date with respect to
liabilities and claims (and related expenses) made against them
resulting from their service as such prior to the Effective Date
in accordance with and subject to the requirements and other
provisions of Meridian's articles of incorporation and bylaws in
effect on the date of this Agreement and applicable provisions of
law to the same extent as Meridian is obliged thereunder to
indemnify and advance expenses to its own directors and officers
with respect to liabilities and claims made against them
resulting from their service as such for Meridian.
(c) Meridian, from and after the Effective
Date, will provide to the persons who served as directors or
officers of UCB or any UCB Subsidiary on or before the Effective
Date insurance against liabilities and claims (and related
expenses) made against them resulting from their service as such
prior to the Effective Date. Such coverage shall be provided by
means of an extended reporting period endorsement to the policy
presently issued to UCB by the present carrier for UCB. Such
insurance coverage will be provided for a policy period of six
years after the Effective Date.
Section 4.06 No Other Bids and Related Matters.
UCB shall not, nor shall it permit any UCB Subsidiary or any
other Affiliate of UCB or any officer, director or employee of
any of them, or any investment banker, attorney, accountant or
other representative retained by UCB, any UCB Subsidiary or any
other UCB Affiliate to, directly or indirectly, solicit,
encourage, initiate or, except as may be legally required for the
discharge by UCB's Board of Directors of its fiduciary duty but
only prior to the effectiveness of the Registration Statement,
engage in discussions or negotiations with, or respond to
requests for information, inquiries, or other communications
from, any person other than Meridian concerning the fact of, or
the terms and conditions of, this Agreement, or concerning any
acquisition of UCB, any UCB Subsidiary, or any assets or business
thereof (except that UCB's officers may respond to inquiries from
analysts, Regulatory Authorities and holders of UCB Common Stock
in the ordinary course of business). UCB shall notify Meridian
immediately if any such discussions or negotiations are sought to
be initiated with UCB by any person other than Meridian or if any
such requests for information, inquiries, proposals or
communications are received from any person other than Meridian.
In the event of a response or discussions by UCB in accordance
with this Section 4.06, UCB shall keep Meridian advised of all
developments which could reasonably be expected to result in the
UCB Board of Directors withdrawing, modifying or amending its
recommendation of the Merger.
Section 4.07 Core Deposits. UCB shall, and shall
cause each UCB Subsidiary to, use commercially reasonable efforts
to maintain and increase core deposits (other than certificates
of deposit of $100,000 and over).
Section 4.08 Duty to Advise; Duty to Update UCB's
Disclosure Schedule. UCB shall promptly advise Meridian of any
change or event having a Material Adverse Effect on it or which
it believes would or would be reasonably likely to cause or
constitute a material breach of any of its representations,
warranties or covenants set forth herein. UCB shall update UCB's
Disclosure Schedule as promptly as practicable after the
occurrence of an event or fact which, if such event or fact had
occurred prior to the date of this Agreement, would have been
disclosed in such Disclosure Schedule. The delivery of such
updated Disclosure Schedule shall not relieve UCB from any breach
or violation of this Agreement and shall not have any effect for
the purposes of determining the satisfaction of the condition set
forth in Sections 5.02(b) hereof.
Section 4.09 Conduct of Meridian's Business. From
the date of this Agreement to the Closing Date, Meridian will use
its best efforts to (x) preserve its business organizations
intact, (y) maintain good relationships with employees, and
(z) preserve for itself the goodwill of customers of Meridian and
Meridian Subsidiaries and others with whom business relationships
exist. In addition, Meridian shall not take any action that
Meridian knows would preclude satisfaction of the condition to
closing contained in Section 5.02(k) relating to financial
accounting treatment.
Section 4.10 Board and Committee Minutes and
Meetings. UCB shall provide to Meridian, within 15 business days
after any meeting of the Board of Directors of UCB or UCTC, a
copy of the minutes of such meeting. UCB shall also provide to
Meridian as soon as available prior to any meeting of the Board
of Directors of UCB, any committee of the Board of Directors of
UCB, or any senior management committee of UCB copies of
materials, including the agenda, distributed to such UCB
directors or officers in connection with any such meeting.
Section 4.11 Undertakings by Meridian and UCB.
(a) UCB shall:
(i) Voting by Directors. Use reasonable
efforts to cause all members of UCB's Board of Directors
to vote all shares of UCB's Common Stock over which they
hold sole voting power, and to cause all shares over
which they hold shared voting power to be voted, in favor
of this Agreement;
(ii) Approval of Bank Plan of Merger. If
all other conditions to UCB's obligation to complete
these transactions have been met or waived, approve the
Bank Plan of Merger as sole shareholder of UCTC and
obtain the approval of, and cause the execution and
delivery of, the Bank Plan of Merger by UCTC; and
(iii) Proxy Solicitor. If Meridian
requests and agrees to bear the expense thereof, retain a
proxy solicitor in connection with the solicitation of
UCB shareholder approval of this Agreement; or
(b) Meridian and UCB shall each:
(i) Shareholder Meetings. Submit this
Agreement to their respective shareholders for approval
at a meeting to be held as soon as practicable, and use
their respective best efforts to cause their respective
Boards of Directors to unanimously recommend approval of
this Agreement to their respective shareholders, and, if
there are not sufficient votes at the time of such
meeting to constitute a quorum or to approve this
Agreement, adjourn such meetings for a period not to
exceed 30 days to permit further solicitation of proxies;
(ii) Filings and Approvals. Cooperate
with the other in the prompt preparation and filing, as
soon as practicable, of (A) the Applications, (B) the
Registration Statement and related filings under state
securities laws covering the Meridian Common Stock and
related Meridian Stock Purchase Rights to be issued
pursuant to the Merger, (C) all other documents necessary
to obtain any other approvals and consents required to
effect the completion of the Merger and the Bank Merger,
and (D) all other documents contemplated by this
Agreement;
(iii) Identification of UCB's Affiliates.
Cooperate with the other and use its best efforts to
identify those persons who may be deemed to be Affiliates
of UCB;
(iv) Public Announcements. Meridian and
UCB and their respective officers, directors, employees
and agents will cooperate with each other in good faith,
consistent with their respective legal obligations, in
the preparation and distribution of any and all press
releases, announcements and other public disclosures
concerning the transactions contemplated hereby. Neither
party will make a public announcement concerning without
first giving the other party reasonable opportunity to
review and comment on such announcement.
(v) Maintenance of Insurance. Maintain,
and cause their respective Subsidiaries to maintain,
insurance in such amounts as are reasonable to cover such
risks as are customary in relation to the character and
location of its properties and the nature of its
business;
(vi) Maintenance of Books and Records.
Maintain, and cause their respective Subsidiaries to
maintain, books of account and records in accordance with
generally accepted accounting principles applied on a
basis consistent with those principles used in preparing
the financial statements heretofore delivered;
(vii) Delivery of Securities Documents.
Deliver to the other, copies of all Securities Documents
immediately after the filing thereof;
(viii) Taxes. File all federal, state,
and local tax returns required to be filed by them or
their respective Subsidiaries on or before the date such
returns are due (including any extensions) and pay all
taxes shown to be due on such returns on or before the
date such payment is due; or
(ix) Delivery of Interim Financial
Statements. Deliver as soon as practicable after the end
of each month and each fiscal quarter prior to the
Effective Date, (but in any event during the 5 business
day period following UCB Board of Director approval
thereof) commencing with the month during which this
Agreement is executed, an unaudited consolidated balance
sheet as of such date and related unaudited consolidated
statements of income and cash flows for the period then
ended, which financial statements shall be prepared in
accordance with generally accepted accounting principles
consistently applied and shall fairly reflect its
consolidated financial condition and consolidated results
of operations and cash flows for the periods then ended.
Monthly financial statements shall be kept confidential
in accordance with Section 4.02.
Section 4.12 Employee Benefits.
(a) Except as provided in Section 4.12(b), the
employee benefit plans, arrangements and related policies of UCB,
UCTC and Meridian shall initially be unaffected by the Merger.
Following the Merger, Meridian will review such plans,
arrangements and policies with a view toward consolidating the
same to the extent feasible and economical. In this regard, UCB
and Meridian contemplate that, subject to Internal Revenue
Service and Pension Benefit Guaranty Corporation approval, the
defined benefit pension plans of UCTC and Meridian will be merged
as soon as administratively feasible. To the extent former
employees of UCB or a UCB Subsidiary become participants in a
plan of Meridian, they will be given past service credit for
eligibility, participation, and vesting purposes, but not for
benefit accrual purposes. For purposes of benefit accrual,
credited service under the Meridian plan will commence on the day
following the date of plan merger. When a former UCTC plan
participant retires, he or she will receive a benefit which
consists of the sum of (i) the benefit determined under the UCTC
plan as it existed as of the date of plan merger for years of
service based on an employee's original employment date with UCB
through the date of plan merger utilizing actual current
compensation earned as of retirement date and (ii) the benefit
calculated under the Meridian plan from the day following the
date of plan merger through retirement date.
(b) Employees of UCB and the UCB Subsidiaries
immediately prior to the Effective Date, who become employees of
Meridian or a Meridian Subsidiary, will receive Compensation and
Benefit Packages no less favorable, in the aggregate, than the
Compensation and Benefits Packages to which they were entitled
immediately prior to the Effective Date. For purposes of the
preceding sentence, the term "Compensation and Benefit Package"
means an employee's total salary, wage, bonus and benefits,
including, without limitation, benefits under the UCTC Profit
Sharing Plan proposed to be terminated under Section 4.12(c).
Neither UCB nor a UCB Subsidiary maintains a severance policy or
arrangement for terminated employees generally. Employees of UCB
and the UCB Subsidiaries immediately prior to the Effective Date,
who become employees of Meridian or a Meridian Subsidiary and are
involuntarily terminated within one year thereafter, will receive
a severance benefit equal to one week of pay in effect
immediately prior to termination times the number of whole years
of service with UCB, a UCB Subsidiary, Meridian, and a Meridian
Subsidiary, subject to a minimum of 4 weeks of pay and maximum of
30 weeks of pay.
(c) Notwithstanding the provisions of
Section 4.12(a), UCB will take such steps as may be necessary to
cause the UCTC Profit Sharing Plan to be terminated as of the
Effective Date. The employer contribution (if any) for the year
of plan termination shall be appropriately pro rated to take into
account the portion of the plan year transpiring prior to its
termination date. Provision shall be made for the distribution
of assets to participants, subject to IRS approval. Meridian
will cooperate with the proper funding and disbursement of funds
to UCTC employees entitled to a distribution.
(d) Subject to Section 4.12(a) and (b) and
Section 5.01(l), Meridian may at any time and from time to time
following the Merger (i) amend, freeze or terminate an employee
benefit plan of Meridian, UCB or a UCB Subsidiary, or (ii) adopt
a new employee benefit plan, either to replace a prior plan or
otherwise. Nothing in this Section 4.12 shall be deemed to give
Meridian the right to amend or affect in any way the employment
agreements referred to in Section 2.08(c).
(e) Meridian will honor and discharge the
obligations of UCTC under the Benefit Equalization Plan which
have accrued immediately prior to the Effective Date and which
may thereafter accrue by reason of Meridian's compliance with the
terms of this Agreement.
(f) Meridian will honor and discharge the
obligations of UCTC to its retirees under its post-retirement
health care and life insurance plan. Meridian will honor and
discharge the obligations of UCTC, if any, to its employees who
are not retired under its post-retirement health care and life
insurance plan to the extent such rights are not defeasible,
either immediately prior to or after the Effective Date.
Section 4.13 Employee Relations.
(a) To the extent any employees of UCB may be
displaced from their current positions as a result of the Merger,
Meridian shall endeavor to offer employment to such persons at
their then current location or at other Meridian locations where
employment is then available.
(b) The UCTC Profit Sharing Plan shall be
terminated as of the Effective Date. The annual UCB contribution
for the calendar year in which the closing occurs, shall be pro
rated to the date of termination according to the formula set
forth in the Plan and paid by UCTC to the Plan as soon as
practicable after the Effective Date. In addition, prior to the
termination of the UCB Profit Sharing Plan, it shall be amended,
effective as of the first day of the plan year in which the
Effective Date occurs, to modify the definition of "Adjusted Net
Operating earnings" so as not to include as an expense the costs
incurred by UCB and the UCB Subsidiaries which are directly
attributable to the Merger.
Section 4.14 Relocation of Corporate Headquarters.
Meridian shall, effective as of the Effective Date, cause MBNJ to
relocate its corporate headquarters to the address of UCB's
present corporate headquarters in Cranford, New Jersey and cause
the certificate of incorporation of MBNJ to be amended to reflect
such relocation.
Section 4.15 Post-Closing Board Membership.
(a) Meridian shall maintain the existing
membership of the two regional Boards of Directors of UCTC on the
date hereof until at least December 31, 1996 at the same fee
schedule existing on the date hereof.
(b) In the event that MBNJ is merged out of
existence, former UCTC directors who become directors of MBNJ
shall become, at least until December 31, 1996, a regional board
of directors at the same fee schedule (including any retainers
paid by UCTC on the date hereof).
ARTICLE V
CONDITIONS
Section 5.01 Conditions to UCB's Obligations under
this Agreement. The obligations of UCB hereunder shall be
subject to satisfaction at or prior to the Closing Date of each
of the following conditions, unless waived by UCB pursuant to
Section 7.03 hereof:
(a) Corporate Proceedings. All action
required to be taken by, or on the part of, Meridian and MBNJ to
authorize the execution, delivery and performance of this
Agreement and the Bank Plan of Merger, respectively, and the
consummation of the transactions contemplated hereby, shall have
been duly and validly taken by Meridian and MBNJ; and UCB shall
have received certified copies of the resolutions evidencing such
authorizations;
(b) Covenants; Representations. The
obligations of Meridian required by this Agreement to be
performed by Meridian at or prior to the Closing Date shall have
been duly performed and complied with in all material respects;
and the representations and warranties of Meridian set forth in
this Agreement shall be true and correct in all material
respects, as of the date of this Agreement, and as of the
Closing Date as though made on and as of the Closing Date,
provided however that UCB has given Meridian written notice and a
reasonable opportunity to cure, and, in each case, except as to
any representation or warranty (i) where the facts which cause
the failure of such representation or warranty to be true and
correct would not, either individually or in the aggregate,
result in a Material Adverse Effect on the consolidated assets,
financial condition or results of operation of Meridian and its
subsidiaries taken as a whole; or (ii) which specifically relates
to a time other than the Closing Date which was or shall be true
in all material respects at such time or times;
(c) Approvals of Regulatory Authorities.
Meridian shall have received all approvals of Regulatory
Authorities of the Merger, including without limitation the
approval of the FDIC, the FRB and NJDOB, and delivered copies
thereof to UCB; and all notice and waiting periods required
thereunder shall have expired or been terminated;
(d) No Injunction. There shall not be in
effect any order, decree or injunction of a court or agency of
competent jurisdiction which enjoins or prohibits consummation of
the transactions contemplated hereby;
(e) No Material Adverse Change. Since
March 31, 1995, there shall not have occurred any material
adverse change in the consolidated assets, business, consolidated
financial condition or consolidated results of operation, taken
as a whole, of Meridian and its Subsidiaries;
(f) Officer's Certificate. Meridian shall
have delivered to UCB a certificate, dated the Closing Date and
signed, without personal liability, by its chairman or president,
to the effect that the conditions set forth in subsections (a)
through (e) of this Section 5.01 have been satisfied, to the best
knowledge of the officer executing the same;
(g) Opinion of Meridian's Counsel. UCB shall
have received an opinion of Stevens & Lee, counsel to Meridian,
dated the Closing Date, in form and substance reasonably
satisfactory to UCB and its counsel to the effect set forth on
Exhibit 4 attached hereto;
(h) Registration Statement. The Registration
Statement shall be effective under the Securities Act and no
proceedings shall be pending or threatened by the SEC to suspend
the effectiveness of the Registration Statement; and all required
approvals by state securities or "blue sky" authorities with
respect to the transactions contemplated by this Agreement,
deemed necessary by Meridian's counsel, shall have been obtained;
(i) Tax Opinion. UCB shall have received an
opinion of Stevens & Lee, substantially to the effect set forth
on Exhibit 5 attached hereto and reasonably acceptable to counsel
to UCB;
(j) Approval of UCB's Shareholders. This
Agreement shall have been approved by the holders of at least
66-2/3% of the shares of UCB's Common Stock entitled to vote at the
meeting at which the Merger is considered;
(k) Employment Contracts. MBNJ and Meridian,
jointly and severally, shall have specifically acknowledged,
accepted and assumed the employment contracts referred to in
Section 2.08(c) in a writing delivered to the employees covered
thereby, and UCB shall have received an opinion of Stevens & Lee
substantially to the effect that such employment contracts will
constitute binding obligations of Meridian and MBNJ enforceable
in accordance with their respective terms, except as the same may
be limited by insolvency, reorganization, moratorium,
receivership, conservatorship or other laws affecting creditors'
rights generally or as may be limited by the exercise of judicial
discretion in applying principles of equity;
(l) Directors/Officers. (i) Two nominees,
designated by UCB and reasonably acceptable to Meridian shall be
duly appointed by the Board of Directors of Meridian, one to fill
a vacancy in the class of Meridian directors which serves until
the Annual Meeting of Meridian shareholders in 1997 and one to
fill a vacancy in the class of Meridian directors which serves
until the Annual Meeting of Meridian shareholders in either 1996
or 1998, respectively; and (ii) Albert W. Bossert, Anton J.
Campanella, Edward J. Hobbie, John E. Holobinko, William C.
Johnson, Jr., Robert G. Kenney, Henry G. Largey, Donald S.
Nowicki and Maureen E. Staub shall be duly appointed as directors
of MBNJ, joining Samuel A. McCullough, David E. Sparks, P. Sue
Perrotty, Wayne Huey, Jr. and Paul W. McGloin. The Board of
Directors of MBNJ, with the consent of Meridian, may also appoint
other current officers or directors of UCB and/or UCTC as
officers and/or directors of Meridian and/or MBNJ, in Meridian's
discretion. Meridian presently intends to keep, as officers of
MBNJ, as many officers of UCTC as is practicable;
(m) D&O Insurance. UCB shall have received
evidence, reasonably satisfactory to it, that Meridian shall have
obtained the insurance referred to in Section 4.05(c);
(n) Pooling Letter. UCB shall have received a
copy of the letter provided for in Section 5.02(k);
(o) NASDAQ Listing. The shares of Common
Stock of Meridian issuable in exchange for shares of UCB Common
Stock and for the exercise of options shall be approved for
listing on the Nasdaq Stock Market; and
(p) Defined Benefit Plan Merger Documents.
UCB shall have approved the plan merger documents for the merger
of the UCB and Meridian defined benefit pension plans, which
approval shall not be unreasonably withheld.
(q) Investment Banking Opinion. UCB shall
have received an updated written opinion from Goldman, Sachs &
Co., dated not earlier than three business days before the
mailing date of the Prospectus/Proxy Statement, to the effect the
Exchange Ratio is fair to the shareholders of UCB.
Section 5.02 Conditions to Meridian's Obligations
under this Agreement. The obligations of Meridian hereunder
shall be subject to satisfaction at or prior to the Closing Date
of each of the following conditions, unless waived by Meridian
pursuant to Section 7.03 hereof:
(a) Corporate Proceedings. All action
required to be taken by, or on the part of, UCB and UCTC to
authorize the execution, delivery and performance of this
Agreement and the Bank Plan of Merger, respectively, and the
consummation of the transactions contemplated hereby, shall have
been duly and validly taken by UCB and UCTC; and Meridian shall
have received certified copies of the resolutions evidencing such
authorizations;
(b) Covenants; Representations. The
obligations of UCB, required by this Agreement to be performed by
it at or prior to the Closing Date shall have been duly performed
and complied with in all material respects; and the
representations and warranties of UCB set forth in this Agreement
shall be true and correct in all material respects as of the date
of this Agreement, and as of the Closing Date as though made on
and as of the Closing Date, provided, however, that Meridian has
given UCB written notice and a reasonable opportunity to cure,
and, in each case, except as to any representation or warranty
(i) where the facts which cause the failure of such
representation or warranty to be true and correct would not,
either individually or in the aggregate, results in a Material
Adverse Effect on the consolidated assets, financial condition or
results of operation of UCB and its subsidiaries taken as a
whole; or (ii) which specifically relates to a time other than
the Closing Date which was or shall be true in all material
respects at such time or times;
(c) Approvals of Regulatory Authorities.
Meridian shall have received all approvals of Regulatory
Authorities for the Merger, including without limitation the
approvals of the FRB, the FDIC, the NJDB and the PDB, without the
imposition of any term or condition that would have a material
adverse effect on Meridian and its Subsidiaries, taken as a
whole, upon completion of the Merger; and all notice and waiting
periods required thereunder shall have expired or been
terminated;
(d) No Injunction. There shall not be in
effect any order, decree or injunction of a court or agency of
competent jurisdiction which enjoins or prohibits consummation of
the transactions contemplated hereby;
(e) No Material Adverse Change. Since
March 31, 1995, there shall not have occurred any material
adverse change in the consolidated assets, business, consolidated
financial condition or consolidated results of operation, taken
as a whole, of UCB and the UCB Subsidiaries;
(f) Officer's Certificate. UCB shall have
delivered to Meridian a certificate, dated the Closing Date and
signed, without personal liability, by its chairman of the board
or president, to the effect that the conditions set forth in
subsections (a) through (e) of this Section 5.02 have been
satisfied, to the best knowledge of the officer executing the
same;
(g) Opinions of UCB's Counsel. Meridian shall
have received an opinion of counsel to UCB dated the Closing
Date, in form and substance reasonably satisfactory to Meridian
and its counsel to the effect set forth on Exhibit 6 attached
hereto;
(h) Registration Statement. The Registration
Statement shall be effective under the Securities Act and no
proceedings shall be pending or threatened by the SEC to suspend
the effectiveness of the Registration Statement; and all required
approvals by state securities or "blue sky" authorities with
respect to the transactions contemplated by this Agreement,
deemed necessary by Meridian's counsel, shall have been obtained;
(i) Tax Opinion. Meridian shall have received
an opinion of Stevens & Lee, its counsel, substantially to the
effect set forth on Exhibit 5 attached hereto;
(j) Approval of Meridian's Shareholders. This
Agreement shall have been approved by the affirmative vote of at
least a majority of the votes cast by holders of shares of
Meridian Common Stock voted at the meeting at which the Merger is
considered; and
(k) Pooling Letter. Meridian shall have
received a letter from KPMG Peat Marwick to the effect that the
Merger will be treated as a "pooling of interests" for financial
accounting purposes.
ARTICLE VI
TERMINATION, WAIVER AND AMENDMENT
Section 6.01 Termination. This Agreement may be
terminated on or at any time prior to the Closing Date:
(a) By the mutual written consent of the
parties hereto; or
(b) By Meridian or UCB:
(i) if the Closing Date shall not have
occurred within one (1) year from the date of this
Agreement, unless the failure of such occurrence shall be
due to the failure of the party seeking to terminate this
Agreement to perform or observe its agreements set forth
in this Agreement required to be performed or observed by
such party on or before the Closing Date; or
(ii) if either party has been informed in
writing by a Bank Regulatory Authority whose approval or
consent has been requested that such approval or consent
is unlikely to be granted, unless the failure of such
occurrence shall be due to the failure of the party
seeking to terminate this Agreement to perform or observe
its agreements set forth herein required to be performed
or observed by such party on or before the Closing Date;
or shareholders of Meridian or UCB fail to approve this Agreement at
the meetings (including any adjournments thereof) held for such
purpose unless in each case the failure of such occurrence shall
be due to the failure of the party seeking to terminate this
Agreement to perform or observe its agreements set forth herein
to be performed or observed by such party at or before the
Effective Date (including in the case of UCB the failure by any
of the persons who executed the letter agreement in the form
attached hereto as Exhibit 1 to perform or observe the agreements
set forth therein).
(d) By Meridian or UCB if any condition to
Closing specified under Article V of this Agreement applicable to
such party cannot reasonably be met on or before the Effective
Date and both parties reasonably agree that such condition cannot
be met.
Section 6.02 Effect of Termination. If this
Agreement is terminated pursuant to Section 6.01 hereof, this
Agreement shall forthwith become void (other than
Section 4.02(d), 4.02(e), Section 4.11(b)(iv) and Section 7.01
hereof, which shall remain in full force and effect), and there
shall be no further liability on the part of Meridian or UCB to
the other, except for any liability of Meridian or UCB under
such sections of this Agreement and except for any liability
arising out of any uncured willful breach of any covenant or
other agreement contained in this Agreement or any fraudulent
breach of a representation or warranty.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Expenses. Except for the cost of
printing and mailing the Proxy Statement/Prospectus which shall
be shared equally, each party hereto shall bear and pay all costs
and expenses incurred by it in connection with the transactions
contemplated hereby, including fees and expenses of its own
financial consultants, accountants and counsel.
Section 7.02 Survival of Representations,
Warranties and Covenants . All representations, warranties and,
except to the extent specifically provided otherwise herein,
agreements and covenants shall terminate on the Closing Date.
The covenants contained in Sections 4.05 and 4.15 shall survive
the Closing Date and the Effective Date.
Section 7.03 Amendment, Extension and Waiver.
Subject to applicable law, at any time prior to the consummation
of the transactions contemplated by this Agreement, the parties
may (a) amend this Agreement, (b) extend the time for the
performance of any of the obligations or other acts of either
party hereto, (c) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered
pursuant hereto, or (d) waive compliance with any of the
agreements or conditions contained herein. This Agreement may
not be amended except by an instrument in writing authorized by
the respective Boards of Directors and signed, by duly authorized
officers, on behalf of the parties hereto. Any agreement on the
part of a party hereto to any extension or waiver shall be valid
only if set forth in an instrument in writing signed by a duly
authorized officer on behalf of such party, but such waiver or
failure to insist on strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
Section 7.04 Entire Agreement. This Agreement,
including the documents and other writings referred to herein or
delivered pursuant hereto, contains the entire agreement and
understanding of the parties with respect to its subject matter.
This Agreement supersedes all prior arrangements and
understandings between the parties, both written or oral with
respect to its subject matter. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors; provided, however, that nothing in this
Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto and their respective
successors, any rights, remedies, obligations or liabilities
other than pursuant to Section 4.05(b), (c) and (d) with respect
to indemnification and directors and officers liability
insurance.
Section 7.05 No Assignment. Neither party hereto
may assign any of its rights or obligations hereunder to any
other person, without the prior written consent of the other
party hereto.
Section 7.06 Notices. All notices or other
communications hereunder shall be in writing and shall be deemed
given if delivered personally, mailed by prepaid registered or
certified mail (return receipt requested), or sent by telecopy,
addressed as follows:
(a) If to Meridian, to:
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19603
Attention: David E. Sparks, Chief
Financial Officer
and
Michael J. Hughes
Senior Vice President,
Corporate
Development
Telecopy No.: (610) 665-2428
with a copy to:
Stevens & Lee
111 North Sixth Street
P.O. Box 679
Reading, Pennsylvania 19603
Attention: Joseph M. Harenza, Esquire,
and
David W. Swartz, Esquire
Telecopy No.: (610) 376-5610
(b) If to UCB, to:
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey
Attention: Eugene H. Bauer, Chairman
and Chief Executive Officer
and
Alice Cadby, Corporate
Secretary
Telecopy No.: (908) 709-1583
(marked "CONFIDENTIAL")
with a copy to:
Pitney, Hardin, Kipp & Szuch
Mail: P.O. Box 1945
Morristown, New Jersey 07962-1945
Street: 200 Campus Drive
Florham Park, New Jersey 07932-0950
Attention: Ronald Janis, Esquire
Telecopy No.: (201) 966-1550
Section 7.07 Captions. The captions contained in
this Agreement are for reference purposes only and are not part
of this Agreement.
Section 7.08 Counterparts. This Agreement may be
executed in any number of counterparts, and each such counterpart
shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
Section 7.09 Severability. If any provision of
this Agreement or the application thereof to any person or
circumstance shall be invalid or unenforceable to any extent, the
remainder of this Agreement and the application of such
provisions to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent
permitted by law.
Section 7.10 Governing Law. This Agreement shall
be governed by and construed in accordance with the domestic
internal law (including the law of conflicts of law) of the
Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this
Agreement to be executed by their duly authorized officers as of
the day and year first above written.
MERIDIAN BANCORP, INC.
(CORPORATE SEAL) By: /s/ Samuel A. McCullough
Samuel A. McCullough,
Chairman and Chief
Executive Officer
Attest: /s/ William L. Gaunt
William L. Gaunt,
Secretary
UNITED COUNTIES BANCORPORATION
(CORPORATE SEAL) By: /s/ Eugene H. Bauer
Eugene H. Bauer
Chairman and Chief
Executive Officer
Attest: /s/ Alice R. Cadby
Alice R. Cadby
Corporate Secretary
<PAGE>
Exhibits
Exhibit 1 - UCB Affiliate Agreement
Exhibit 2 - Stock Option Agreement
Exhibit 3 - Bank Plan of Merger
Exhibit 4 - Form of Opinion of Meridian's Counsel
Exhibit 5 - Form of Tax Opinion of Meridian's Counsel
Exhibit 6 - Form of Opinion of UCB's Counsel
<PAGE>
Exhibit 1
May 23, 1995
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19601
Ladies and Gentlemen:
Meridian Bancorp, Inc. ("Meridian") and United Counties
Bancorporation ("UCB") desire to enter into a business
combination pursuant to which (a) UCB will merge with and into
Meridian, with Meridian surviving the merger, and
(b) shareholders of UCB will receive common stock of Meridian in
exchange for common stock of UCB outstanding on the closing date
(the foregoing, collectively, referred to herein as the
"Merger"). The undersigned, being directors and executive
officers or significant shareholders of UCB, execute and deliver
to Meridian this Letter Agreement in connection with the Merger.
Each of the undersigned hereby jointly, severally and
irrevocably:
(a) Agrees to be present (in person or by proxy) at
all meetings of shareholders of UCB called to vote for approval
of the Merger, so that all shares of common stock or UCB then
owned by him will be counted for the purpose of determining the
presence of a quorum at such meetings and to vote all such shares
(i) in favor of approval and adoption of the Merger and
(ii) against approval or adoption of any other merger, business
combination, recapitalization, partial liquidation or similar
transaction involving UCB, provided, however, that this
obligation shall terminate concurrently with any termination of
the Merger;
(b) Agrees to use his or her best efforts to cause
the Merger to be completed;
(c) Agrees not to sell, transfer or otherwise
dispose of any common stock of UCB except for family gifts or
charitable contributions prior to closing of the Merger or any
shares of Meridian Common Stock after closing of the Merger until
such time as financial results covering at least 30 days of post-
merger combined operating results of Meridian and UCB have been
published as required by applicable securities laws.
(d) If the undersigned is the holder of stock
options to acquire UCB common stock, acknowledges that, in the
Merger, options, if any, to acquire UCB common stock held by him
or her will be exchanged for options to acquire Meridian Common
Stock, and agrees to such exchange;
(e) Agrees not to solicit, initiate or engage in
any negotiations or discussions with any party other than
Meridian with respect to any offer, sale, transfer or other
disposition of, any shares of common stock of UCB now or
hereafter owned by him or to support any such offer, sale,
transfer, or other disposition, unless advised in writing to the
contrary by the Board of Directors of UCB;
(f) Agrees not to offer, sell, transfer or
otherwise dispose of any shares of Meridian Common Stock received
in the Merger, except in accordance with Rule 145 under the
Securities Act, which is applicable to all sales of securities
received by affiliates of the corporation required in a business
combination; and further understands and agrees that Meridian's
stock transfer agent will be given appropriate stop transfer
instructions with respect to the foregoing;
(g) Acknowledges and agrees that the provisions of
subparagraphs (c) and (f) hereof also apply to shares of Meridian
Common Stock received in the Merger (or any shares of UCB common
stock or of Meridian Common Stock, whether or not received in the
Merger, for the period referred to in subparagraph (c) above,
owned by (i) his or her spouse, (ii) any of his or her relatives
or relatives of his or her spouse occupying his home, and
(iii) any other of his or her affiliates or associates;
(h) Represents that he or she has the capacity to
enter into this Letter Agreement, and, if signing on behalf of a
corporation or other organization, has authority to bind such
corporation or other organization, and that it is a valid and
binding obligation.
_________________________
This Letter Agreement may be executed in two or more
counterparts, each of which shall be deemed to constitute an
original, but all of which together shall constitute one and the
same Letter Agreement.
_________________________
This Letter Agreement shall be effective upon execution
by two or more persons listed below.
_________________________
This Letter Agreement shall terminate concurrently with
any termination of the Merger in accordance with its terms.
_________________________
The undersigned intend to be legally bound hereby.
Very truly yours,
__________________________________
Eugene H. Bauer
__________________________________
Anton J. Campanella
__________________________________
John E. Holobinko
__________________________________
William C. Johnson, Jr.
__________________________________
Henry G. Largey
__________________________________
Donald S. Nowicki
<PAGE>
__________________________________
Robert J. Bauer, individually and
on behalf of C. H. Winans Company
__________________________________
Robert W. Dowens, Sr.
__________________________________
Theodore E. Zuczek
__________________________________
J. Richard Pierce
__________________________________
Janice H. Levin, individually and
on behalf of Levin Properties
__________________________________
Raymond W. Bauer, individually and
on behalf of C.H. Winans Company
__________________________________
Nicholas A. Frungillo, Jr.
__________________________________
Albert W. Bossert
__________________________________
Walter W. Gauer
__________________________________
William G. Palmero
__________________________________
Maureen Staub
__________________________________
Robert G. Kenney
<PAGE>
Exhibit 2
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Stock Option
Agreement") dated May 23, 1995, is by and between MERIDIAN
BANCORP, INC., a Pennsylvania corporation ("Meridian"), and
UNITED COUNTIES BANCORPORATION, a New Jersey corporation ("UCB").
BACKGROUND
1. Meridian and UCB desire to enter into an
agreement, dated May 23, 1995 (the "Agreement"), providing, among
other things, for the merger of UCB and Meridian, with Meridian
surviving the merger (the "Merger").
2. As a condition of Meridian entering into the
Agreement on the terms and conditions relating to price set forth
in the Agreement, UCB is granting to Meridian an option to
purchase up to 375,000 shares of common stock of UCB, subject to
adjustment as provided in Section 5, on the terms and conditions
hereinafter set forth.
AGREEMENT
In consideration of the foregoing and the mutual
covenants and agreements set forth herein, Meridian and UCB,
intending to be legally bound hereby, agree:
1. Grant of Option. UCB hereby grants to
Meridian, on the terms and conditions set forth herein, the
option to purchase (the "Option") up to 375,000 shares (the
"Option Shares") of common stock, stated value $1.00 per share
(the "Common Stock"), of UCB, subject to adjustment as provided
in Section 5, at a price per share (the "Option Price") equal to
$125.00; provided, however, that in the event UCB issues or
agrees to issue (including through the issuance of any Rights (as
defined in the Agreement)) any shares of Common Stock, except for
shares issuable under outstanding stock options, at a price less
than $125.00 per share (as adjusted pursuant to Section 5 of this
Stock Option Agreement), such $125.00 per share price shall be
reduced to such lesser price.
2. Exercise of Option. Upon or after the
occurrence of a Triggering Event (as such term is hereinafter
defined) and until termination of this Stock Option Agreement in
accordance with the provisions of Section 21, Meridian may
exercise the Option, in whole or in part, at any time or one or
more times, from time to time. As used herein, the term
"Triggering Event" means the occurrence of any of the following
events:
(a) a person or group (as such terms are
defined in the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and
regulations thereunder), other than Meridian, an
affiliate of Meridian or any present shareholder of UCB
which or who presently owns more than 9.9% of the
presently outstanding shares of Common Stock, acquires
beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of more than 9.9% of the then
outstanding shares of Common Stock; provided, however
that a Triggering Event shall occur under this
Section 2(a) in the event any present shareholder of UCB
which or who presently owns more than 9.9% of the
presently outstanding shares of Common Stock increases
such shareholder's beneficial ownership to greater than
14.9% of the then outstanding shares of Common Stock;
(b) a person or group, other than Meridian or
an affiliate of Meridian, enters into an agreement or
letter of intent with UCB pursuant to which such person
or group or any affiliate of such person or group would
(i) merge or consolidate, or enter into any similar
transaction, with UCB or United Counties Trust Company
("UCTC"), (ii) acquire all or substantially all of the
assets of UCB or all or substantially all of the assets
or liabilities of UCTC, or (iii) acquire beneficial
ownership of securities representing, or the right to
acquire beneficial ownership or to vote securities
representing, more than 9.9% of the then outstanding
shares of Common Stock or the then outstanding shares of
common stock of UCTC; or
(c) a person or group, other than Meridian or
an affiliate of Meridian, publicly announces a bona fide
proposal (including a written communication that is or
becomes the subject of public disclosure) for (i) any
merger, consolidation or acquisition of all or
substantially all the assets of UCB or all or
substantially all of the assets or liabilities of UCTC,
or any other business combination involving UCB or UCTC,
or (ii) a transaction involving the transfer of
beneficial ownership of securities representing, or the
right to acquire beneficial ownership or to vote
securities representing, more than 9.9% of the then
outstanding shares of Common Stock, or any of the then
outstanding shares of common stock of UCTC (collectively,
a "Proposal"), and thereafter, if such Proposal has not
been Publicly Withdrawn (as such term is hereinafter
defined) at least 30 days prior to the meeting of
shareholders of UCB called to vote on the Merger, UCB's
shareholders fail to approve the Merger by the vote
required by applicable law at the meeting of shareholders
called for such purpose or such meeting has been
postponed or cancelled; or
(d) a person or group, other than Meridian or
an affiliate of Meridian, makes a bona fide Proposal and
thereafter, but before such Proposal has been Publicly
Withdrawn, UCB willfully takes any action in a manner
which would materially interfere with UCB's ability to
consummate the Merger or materially reduce the value of
the transaction to Meridian;
(e) UCB breaches the covenant set forth at
Section 4.06 of the Agreement; or
(f) UCB breaches, in any material respect, any
binding terms of the Agreement or any provision of this
Stock Option Agreement or the Agreement after a Proposal
is made and before it is Publicly Withdrawn or publicly
announces an intention to authorize, recommend or accept
any such Proposal; or
(g) any affiliate of UCB breaches any material
provision of the UCB Affiliate Agreement attached as
Exhibit 1 to the Merger Agreement or breaches in any
material respect the covenant set forth in Section 4.06
of the Agreement.
"Publicly Withdrawn" for purposes of this Section 2
shall mean an unconditional bona fide withdrawal of the Proposal
coupled with a public announcement of no further interest in
pursuing such Proposal or in acquiring any controlling influence
over UCB or in soliciting or inducing any other person (other
than Meridian or an affiliate of Meridian) to do so.
Notwithstanding the foregoing, the obligation of UCB
to issue Option Shares upon exercise of the Option shall be
deferred (but shall not terminate) (i) until the receipt of all
required governmental or regulatory approvals or consents
necessary for UCB to issue the Option Shares, or Meridian to
exercise the Option, or until the expiration or termination of
any waiting period required by law, or (ii) so long as any
injunction or other order, decree or ruling issued by any federal
or state court of competent jurisdiction is in effect which
prohibits the sale or delivery of the Option Shares, and, in each
case, notwithstanding any provision to the contrary set forth
herein, the Option shall not expire or otherwise terminate.
UCB shall notify Meridian promptly in writing of the
occurrence of any Triggering Event known to it, it being
understood that the giving of such notice by UCB shall not be a
condition to the right of Meridian to exercise the Option. UCB
will not take any action which would have the effect of
preventing or disabling UCB from delivering the Option Shares to
Meridian upon exercise of the Option or otherwise performing its
obligations under this Stock Option Agreement. In the event
Meridian wishes to exercise the Option, Meridian shall send a
written notice to UCB (the date of which is hereinafter referred
to as the "Notice Date") specifying the total number of Option
Shares it desires to purchase and a place and date between two
and ten business days inclusive from the Notice Date for the
closing of such a purchase (a "Closing"); provided, however, that
a Closing shall not occur prior to two days after the later of
receipt of any necessary regulatory approvals or the expiration
of any legally required notice or waiting period, if any.
3. Payment and Delivery of Certificates. At any
Closing hereunder, (a) Meridian will make payment to UCB of the
aggregate price for the Option Shares so purchased by wire
transfer of immediately available funds to an account designated
by UCB, (b) UCB will deliver to Meridian a stock certificate or
certificates representing the number of Option Shares so
purchased, registered in the name of Meridian or its designee, in
such denominations as were specified by Meridian in its notice of
exercise and bearing a legend as set forth below, and
(c) Meridian will pay any transfer or other taxes required by
reason of the issuance of the Option Shares so purchased.
A legend will be placed on each stock certificate
evidencing Option Shares issued pursuant to this Stock Option
Agreement, which legend will read substantially as follows:
"The shares of stock represented by this
certificate have not been the subject of a
registration statement filed under the Securities
Act of 1933, as amended (the "Act"), and declared
effective by the Securities and Exchange
Commission. These shares may not be sold,
transferred or otherwise disposed of prior to such
time unless United Counties Bancorporation
receives an opinion of counsel stating that an
exemption from the registration provisions of the
Act is available for such transfer."
4. Registration Rights. Upon or after the
occurrence of a Triggering Event and upon receipt of a written
request from Meridian, UCB shall promptly prepare and file a
registration statement under the Securities Act of 1933, as
amended, with the Securities and Exchange Commission covering the
Option and such number of Option Shares as Meridian shall specify
in its request, and UCB shall use its best efforts to cause such
registration statement to be declared effective in order to
permit the sale or other disposition of the Option or the Option
Shares, provided that Meridian shall in no event have the right
to have more than one such registration statement become
effective, and provided further that UCB shall not be required to
prepare and file any such registration statement in connection
with any proposed sale with respect to which UCB's counsel
delivers to UCB and to Meridian its unqualified opinion to the
effect that no such filing is required under applicable laws and
regulations with respect to such sale or disposition. In
connection with such filing, UCB shall use its best efforts to
cause to be delivered to Meridian such certificates, opinions,
accountant's letters and other documents as Meridian shall
reasonably request and as are customarily provided in connection
with registrations of securities under the Securities Act of
1933, as amended. UCB shall provide to Meridian such number of
copies of the preliminary prospectus and final prospectus and any
amendments and supplements thereto as Meridian may reasonably
request. All reasonable expenses incurred by UCB in complying
with the provisions of this Section 4, including, without
limitation, all registration and filing fees, reasonable printing
expenses, reasonable fees and disbursements of counsel for UCB
and blue sky fees and expenses, shall be paid by UCB.
Underwriting discounts and commissions to brokers and dealers
relating to the Option or the Option Shares, fees and
disbursements of counsel to Meridian and any other expenses
incurred by Meridian in connection with such filing shall be
borne by Meridian. In connection with such filing, UCB shall
indemnify and hold harmless Meridian against any losses, claims,
damages or liabilities, joint or several, to which Meridian may
become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in any preliminary or final
registration statement or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and UCB
will reimburse Meridian for any legal or other expense reasonably
incurred by Meridian in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that UCB will not be liable in any case to the
extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such
preliminary or final registration statement or such amendment or
supplement thereto in reliance upon and in conformity with
written information furnished by or on behalf of Meridian
specifically for use in the preparation thereof. Meridian will
indemnify and hold harmless UCB to the same extent as set forth
in the immediately preceding sentence but only with reference to
written information furnished by or on behalf of Meridian for use
in the preparation of such preliminary or final registration
statement or such amendment or supplement thereto; and Meridian
will reimburse UCB for any legal or other expense reasonably
incurred by UCB in connection with investigating or defending any
such loss, claim, damage, liability or action.
5. Adjustment Upon Changes in Capitalization. In
the event of any change in the Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations,
conversions, divisions, exchanges of shares or the like, then the
number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
6. Filings and Consents. Each of Meridian and UCB
will use its best efforts to make all filings with, and to obtain
consents of, all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by
this Stock Option Agreement.
7. Representations and Warranties of UCB. UCB
hereby represents and warrants to Meridian as follows:
(a) Due Authorization. UCB has full corporate
power and authority to execute, deliver and perform this
Stock Option Agreement and all corporate action necessary
for execution, delivery and performance of this Stock
Option Agreement has been duly taken by UCB. This Stock
Option Agreement constitutes a legal, valid and binding
obligation of UCB, enforceable against UCB in accordance
with its terms.
(b) Authorized Shares. UCB has taken all
necessary corporate action to authorize and reserve for
issuance all shares of Common Stock which may be issued
pursuant to any exercise of the Option.
8. Specific Performance. The parties hereto
acknowledge that damages would be an inadequate remedy for a
breach of this Stock Option Agreement and that the obligations of
the parties hereto shall be specifically enforceable.
9. Entire Agreement. This Stock Option Agreement
and the Agreement constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede
all other prior agreements and understandings, both written and
oral, among the parties or any of them with respect to the
subject matter hereof.
10. Assignment or Transfer. Meridian represents
that it is acquiring the Option for Meridian's own account and
not with a view to, or for sale in connection with, any
distribution of the Option or the Option Shares. Meridian is
aware that neither the Option nor the Option Shares are the
subject of a registration statement filed with, and declared
effective by, the Securities and Exchange Commission pursuant to
Section 5 of the Securities Act of 1933, as amended, but instead
are being offered in reliance upon the exemption from the
registration requirement provided by Section 4(2) thereof.
11. Amendment of Stock Option Agreement. By mutual
consent of the parties hereto, this Stock Option Agreement may be
amended in writing at any time, for the purpose of facilitating
performance hereunder or to comply with any applicable regulation
of any governmental authority or any applicable order of any
court or for any other purpose.
12. Validity. The invalidity or unenforceability
of any provision of this Stock Option Agreement shall not affect
the validity or enforceability of any other provisions of this
Stock Option Agreement, which shall remain in full force and
effect.
13. Notices. All notices, requests, consents and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when
delivered personally, by telegram or telecopy, or by registered
or certified mail (postage prepaid, return receipt requested) to
the respective parties as follows:
(i) If to Meridian, to:
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19603
Attention: David E. Sparks, Chief
Financial
Officer
and
Michael J. Hughes
Senior Vice President,
Corporate Development
Telecopy No.: (610) 665-2428
with a copy to:
Stevens & Lee
111 North Sixth Street
Reading, Pennsylvania 19601
Attention: Joseph M. Harenza, Esquire,
and
David W. Swartz, Esquire
Telecopy No.: (610) 376-5610
(ii) If to UCB, to:
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey 07016
Attention: Eugene H. Bauer
Chairman of the Board and
Chief Executive Officer
and
Alice Cadby,
Corporate Secretary
Telecopy No.: (908) 709-1583
(Marked "Confidential")
with copies to:
Pitney, Hardin, Kipp & Szuch
Mail: P.O. Box 1945
Morristown, New Jersey 07962-1945
Street: 200 Campus Drive
Florham Park, New Jersey 07932-8950
Attention: Ronald Janis, Esquire
Telecopy No.: (201) 966-1550
or to such other address as the person to whom notice is to be
given may have previously furnished to the others in writing in
the manner set forth above (provided that notice of any change of
address shall be effective only upon receipt thereof).
14. Governing Law. This Stock Option Agreement
shall be governed by and construed in accordance with the
domestic internal law (but not the law of conflicts of law) of
the Commonwealth of Pennsylvania.
15. Captions. The captions in this Stock Option
Agreement are inserted for convenience and reference purposes,
and shall not limit or otherwise affect any of the terms or
provisions hereof.
16. Waivers and Extensions. The parties hereto
may, by mutual consent, extend the time for performance of any of
the obligations or acts of either party hereto. Each party may
waive (i) compliance with any of the covenants of the other party
contained in this Stock Option Agreement and/or (ii) the other
party's performance of any of its obligations set forth in this
Stock Option Agreement.
17. Parties in Interest. This Stock Option
Agreement shall be binding upon and inure solely to the benefit
of each party hereto, and nothing in this Stock Option Agreement,
express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by
reason of this Stock Option Agreement.
18. Counterparts. This Stock Option Agreement may
be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one
and the same agreement.
\AP Expenses. Except as otherwise provided herein,
all costs and expenses incurred by the parties hereto in
connection with the transactions contemplated by this Stock
Option Agreement or the Option shall be paid by the party
incurring such cost or expense.
20. Representations Relating to Authorizations.
UCB and Meridian each represent and warrant that executions,
delivery and performance of this agreement have been authorized
by their respective boards of directors and constitutes a legal
and valid obligation enforceable in accordance with its terms.
21. Termination. This Stock Option Agreement shall
terminate and be of no further force or effect upon termination
of the Agreement in accordance with the provisions thereof;
provided, however, that, if the termination of the Agreement
occurs after a Triggering Event, this Stock Option Agreement
shall not terminate until expiration of twelve (12) months
following the later of the termination of the Agreement or the
completion or abandonment of any Proposal or any acquisition
transaction relating to the Triggering Event.
22. Severability. If any term, provision, covenant
or restriction contained in this Stock Option Agreement is held
by a court or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions and covenants and restrictions contained
inn this Option Agreement shall remain in full force and effect,
and shall in no way be affected, impaired or invalidated. If for
any reason such court or regulatory agency determines that the
Option will not permit the holder to acquire the full number of
shares of the Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6 hereof), it is the express
intention of UCB to allow the holder to acquire such lesser
number of shares as may be permissible at such lesser price or on
such other repurchase terms as such court or regulatory agency
may indicate to be reasonable, without any amendment or
modification hereof.
IN WITNESS WHEREOF, each of the parties hereto,
pursuant to resolutions adopted by its Board of Directors, has
caused this Stock Option Agreement to be executed by its duly
authorized officer and has caused its corporate seal to be
affixed hereunto and to be duly attested, all as of the day and
year first above written.
MERIDIAN BANCORP, INC.
By /s/Samuel A. McCullough
Samuel A. McCullough,
Chairman and
Chief Executive Officer
(CORPORATE SEAL)
Attest: /s/William L. Gaunt
William L. Gaunt,
Secretary
UNITED COUNTIES BANCORPORATION
By /s/Eugene H. Bauer
Eugene H. Bauer,
Chairman of the Board and
Chief Executive Officer
(CORPORATE SEAL)
Attest: /s/Alice Cadby
Alice Cadby,
Secretary
<PAGE>
Exhibit 3
BANK
PLAN OF MERGER
THIS PLAN OF MERGER ("Plan of Merger") dated as of
May 23, 1995, is by and between MERIDIAN BANK, NEW JERSEY, a New
Jersey banking corporation ("MBNJ"), and UNITED COUNTIES TRUST
COMPANY, a New Jersey banking corporation ("UCTC").
BACKGROUND
1. MBNJ is a wholly-owned subsidiary of Meridian
Bancorp, Inc., a Pennsylvania corporation ("Meridian"). The
authorized capital stock of MBNJ consists of 6,000,000 shares of
common stock, par value $5.00 per share ("MBNJ Common Stock"), of
which at the date hereof 1,000,000 shares are issued and
outstanding.
2. UCTC is a wholly-owned subsidiary of United
Counties Bancorporation, a New Jersey corporation ("UCB"). The
authorized capital stock of UCTC consists of shares of common
stock, with a stated value $5.00 per share ("UCTC Common Stock"),
of which at the date hereof 2,425,900 shares are issued and
outstanding.
3. The respective Boards of Directors of MBNJ and
UCTC deem the merger of UCTC with and into MBNJ, pursuant to the
terms and conditions set forth or referred to herein, to be
desirable and in the best interests of the respective
corporations and their respective shareholders.
4. The respective Boards of Directors of MBNJ and
UCTC have adopted resolutions approving this Plan of Merger. The
respective Boards of Directors of Meridian and UCB have adopted
resolutions approving an Agreement and Plan of Merger (dated as
of May 23, 1995) (the "Agreement"), pursuant to which this Plan
of Merger is being executed by MBNJ and UCTC.
AGREEMENT
In consideration of the premises and of the mutual
covenants and agreements herein contained, and in accordance with
the applicable laws and regulations of the State of New Jersey,
MBNJ and UCTC, intending to be legally bound hereby, agree as
follows:
ARTICLE I
MERGER
Subject to the terms and conditions of this Plan of
Merger and in accordance with the applicable laws of the
Commonwealth of Pennsylvania and the State of New Jersey, on the
Effective Date (as that term is defined in Article V hereof):
UCTC shall merge with and into MBNJ; the separate existence of
UCTC shall cease; and MBNJ shall be the surviving corporation
(such transaction referred to herein as the "Merger" and MBNJ, as
the surviving corporation in the Merger, referred to herein as
the "Surviving Bank").
ARTICLE II
ARTICLES OF INCORPORATION AND BYLAWS
On and after the Effective Date, the articles of
incorporation and bylaws of MBNJ, as in effect immediately prior
to the Effective Date, shall automatically be and remain the
articles of incorporation and bylaws of the Surviving Bank, until
altered, amended or repealed.
ARTICLE III
BOARD OF DIRECTORS AND OFFICERS
3.1. Board of Directors. On and after the Effective
Date, the directors of MBNJ shall consist of (a) those persons
duly elected and holding office immediately prior to the
Effective Date, and (b) Albert W. Bossert, Anton J. Camponella,
Edward J. Hobbie, John E. Holobinko, William C. Johnson, Jr.,
Robert G. Kenney, Henry G. Largey, Donald S. Nowicki and
Maureen E. Staub. Each such director shall hold office until his
or her successor is elected and qualified or otherwise in
accordance with the Bylaws of the Surviving Bank.
3.2. Officers. On and after the Effective Date, the
officers of MBNJ duly elected and holding office immediately
prior to the Effective Date shall be the officers of the
Surviving Bank, except for such former officers of UCTC as shall
be designated as officers of MBNJ, and at MBNJ's election, each
to hold office until his or her successor is elected and
qualified or otherwise in accordance with the bylaws of the
Surviving Bank.
ARTICLE IV
CONVERSION OF SHARES
4.1. Stock of MBNJ. Each share of MBNJ Common Stock
issued and outstanding immediately prior to the Effective Date
shall, on and after the Effective Date, continue to be issued and
outstanding as a share of common stock of the Surviving Bank.
4.2. Stock of UCTC. Each share of UCTC Common Stock
issued and outstanding immediately prior to the Effective Date
shall, on the Effective Date, be cancelled, and no cash, stock or
other property shall be delivered in exchange therefor.
ARTICLE V
EFFECTIVE DATE OF THE MERGER
Subject to the terms and upon satisfaction of all
requirements of law and the conditions specified in this Plan of
Merger, the Merger shall become effective, and the effective date
of the Merger (the "Effective Date") shall occur, at the time
specified in the certificate of merger to be issued by the New
Jersey Department of Banking, but shall not be effective prior to
the effective date of the merger of UCB with and into Meridian as
provided in the Agreement.
ARTICLE VI
EFFECT OF THE MERGER
On the Effective Date, the separate existence of
UCTC shall cease; and all of the property (real, personal and
mixed), rights, powers, duties and obligations of MBNJ and UCTC
shall be taken and deemed to be transferred to and vested in the
Surviving Bank, without further act or deed, as provided by
applicable laws and regulations.
ARTICLE VII
CONDITIONS PRECEDENT
The obligations of MBNJ and UCTC to effect the
Merger shall be subject to the satisfaction, unless duly waived
by the party permitted to do so, of the conditions precedent set
forth in the Agreement.
ARTICLE VIII
TERMINATION
This Plan of Merger shall terminate upon any
termination of the Agreement in accordance with its terms;
provided, however, that any such termination of this Plan of
Merger shall not relieve any party hereto from liability on
account of a breach by such party of any of the terms hereof or
thereof.
ARTICLE IX
AMENDMENT
Subject to applicable law, this Plan of Merger may
be amended, by action of the respective Boards of Directors of
the parties hereto, at any time prior to consummation of the
Merger, but only by an instrument in writing signed by duly
authorized officers on behalf of the parties hereto.
ARTICLE X
MISCELLANEOUS
10.1. Extensions; Waivers. Each party, by a
written instrument signed by a duly authorized officer, may
extend the time for the performance of any of the obligations or
other acts of the other party hereto and may waive compliance
with any of the obligations of the other party contained in this
Plan of Merger.
10.2. Notices. Any notice or other communication
required or permitted under this Plan of Merger shall be given,
and shall be effective, in accordance with the provisions of the
New Jersey Banking Code, as amended.
10.3. Captions. The headings of the several
Articles herein are inserted for convenience of reference only
and are not intended to be part of, or to affect the meaning or
interpretation of, this Plan of Merger.
10.4. Counterparts. For the convenience of the
parties hereto, this Plan of Merger may be executed in several
counterparts, each of which shall be deemed the original, but all
of which together shall constitute one and the same instrument.
10.5. Governing Law. This Plan of Merger shall be
governed by and construed in accordance with the laws of the
State of New Jersey, without reference to the choice of law
principles of such laws.
IN WITNESS WHEREOF, MBNJ and UCTC have caused this
Plan of Merger to be executed by their duly authorized officers
and their corporate seals to be hereunto affixed on the date
first written above.
MERIDIAN BANK, NEW JERSEY, a
New Jersey bank
By______________________________
___
Samuel A. McCullough,
Chairman
(CORPORATE SEAL)
Attest:_________________________
___
Michael J. Hughes,
Secretary
UNITED COUNTIES TRUST COMPANY, a
New Jersey bank
By______________________________
___
(CORPORATE SEAL) Eugene H. Bauer,
Chairman
Attest:_________________________
___
Alice R. Cadby,
Secretary
<PAGE>
EXHIBIT 4
FORM OF OPINION OF COUNSEL TO MERIDIAN
UCB shall have received from counsel to Meridian, an
opinion, dated as of the Closing Date, substantially to the
effect that, subject to normal exceptions and qualifications:
(a) Meridian and Meridian Bank New Jersey have full
corporate power to carry out the transactions contemplated in the
Agreement and the Bank Plan of Merger (the "Plan"), respectively.
The execution and delivery of the Agreement and the Plan and the
consummation of the transactions contemplated thereunder have
been duly and validly authorized by all necessary corporate
action on the part of Meridian and Meridian Bank New Jersey, and
the Agreement and the Plan constitute valid and legally binding
obligations, in accordance with their respective terms, of
Meridian and Meridian Bank New Jersey, respectively, except as
may be limited by bankruptcy, insolvency, reorganization,
moratorium, receivership, conservatorship, and other laws
affecting creditors' rights generally and as may be limited by
the exercise of judicial discretion in applying principles of
equity. Subject to satisfaction of the conditions set forth in
the Agreement, neither the merger of Meridian and UCB nor the
merger of Meridian Bank New Jersey and UCTC, nor compliance by
Meridian and Meridian Bank New Jersey with any of the respective
provisions of the Agreement and the Plan, will (A) conflict with
or result in a breach or default under (i) the Articles of
Incorporation or Bylaws of Meridian or Meridian Bank New Jersey,
or, (ii) to the knowledge of such counsel, any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation to which Meridian or Meridian Bank New Jersey is a
party, or (B) to the knowledge of such counsel, result in the
creation or imposition of any material lien or encumbrance upon
the property of Meridian or Meridian Bank New Jersey, except such
material lien, instrument or obligation as has been disclosed
pursuant to the Agreement and the Plan, or (C) violate in any
material respect any order, writ, injunction, or decree known to
such counsel, or any statute, rule or regulation applicable to
Meridian or Meridian Bank New Jersey.
(b) Meridian Bank New Jersey is a validly existing
state-chartered banking institution organized and in good
standing under the laws of the State of New Jersey. The deposits
of Meridian Bank New Jersey are insured to the maximum extent
provided by law by the Federal Deposit Insurance Corporation.
(c) There is to the knowledge of such counsel no
legal, administrative, arbitration or governmental proceeding or
investigation pending or threatened to which Meridian or Meridian
Bank New Jersey is a party which would, if determined adversely
to Meridian or Meridian Bank New Jersey, have a material adverse
effect on the financial condition or results of operations of
Meridian and Meridian Bank New Jersey taken as a whole or which
presents a claim to restrain or prohibit the transactions
contemplated by the Agreement and the Plan, respectively.
(d) No consent, approval, authorization, or order
of any federal or state court or federal or state governmental
agency or body is required for the consummation by Meridian or
Meridian Bank New Jersey of the transactions contemplated by the
Agreement and the Plan, except for such consents, approvals,
authorizations or orders as have been obtained.
(e) The mergers of Meridian and UCB and Meridian
Bank New Jersey and UCTC contemplated by the Agreement and the
Plan, respectively, have been effected in compliance with all
applicable federal and state laws and regulations in all material
respects.
(f) The shares of Meridian Common Stock to be
issued in connection with the merger of UCB and Meridian
contemplated by the Agreement have been duly authorized and will,
when issued in accordance with the terms of the Agreement, be
validly issued, fully paid and nonassessable.
(g) On the sole basis of such counsel's
participation in conferences with officers and employees of
Meridian in connection with the Prospectus/Proxy Statement, and
without other independent investigation or inquiry, such counsel
has no reason to believe that the Prospectus/Proxy Statement,
including any amendments or supplements thereto (except for the
financial information, financial schedules and other financial or
statistical data contained therein and except for any information
supplied by UCB or UCTC for inclusion therein, as to which
counsel need express no belief), as of the date of mailing
thereof and as of the date of the meeting of shareholders of
Meridian to approve the merger, contained any untrue statement of
a material fact with respect to Meridian or omitted to state any
material fact with respect to Meridian or omitted to state any
material fact with respect to Meridian necessary to make any
statement therein with respect to Meridian, in light of the
circumstances under which it was made, not misleading. Such
counsel may state that in rendering such opinion, they have no
independently verified and do not assume the responsibility for
the accuracy, completeness or fairness of any information or
statements contained in the Prospectus/Proxy Statement, except
with respect to identified statements of law or regulations or
legal conclusions relating to Meridian or the transactions
contemplated in the Agreement and the Plan.
<PAGE>
Exhibit 5
FORM OF TAX OPINION OF STEVENS & LEE
Meridian and UCB shall have received an opinion of Stevens &
Lee substantially to the effect that, under the provisions of the
IRC:
1. The Merger, pursuant to which UCB will transfer all
of its assets to Meridian in exchange for Meridian Common Stock
(including fractional share interests) and the assumption by
Meridian of all of UCB's liabilities will constitute a
reorganization within the meaning of IRC Section 368(a)(1)(A).
2. UCB and Meridian will each be "a party to a
reorganization" within the meaning of IRC Section 368(b).
3. Neither UCB nor Meridian will recognize any gain or
loss upon the transfer of UCB's assets to Meridian in exchange
solely for Meridian Common Stock (including fractional share
interests) and the assumption by Meridian of the liabilities of
UCB.
4. The basis of the UCB assets in the hands of Meridian
will be the same as the basis of such assets in the hands of UCB
immediately prior to the Merger.
5. The holding period of the assets of UCB to be
received by Meridian will include the period during which the
assets were held by UCB.
6. No gain or loss will be recognized by the
shareholders of UCB on the receipt of Meridian Common Stock
(including fractional share interests) solely in exchange for
their shares of UCB Common Stock.
7. The basis of the Meridian common Stock (including
fractional share interests) to be received by the UCB
shareholders in the Merger will be the same as the basis of the
UCB Common Stock surrendered in exchange therefor.
8. The holding period of the Meridian Common Stock
(including fractional share interests) to be received by the UCB
shareholders in the Merger will include the period during which
the UCB shareholders held their UCB Common Stock, provided the
shares of UCB Common Stock are held as a capital asset on the
Effective Date of the Merger.
9. The payment of cash in lieu of fractional share
interests of Meridian Common Stock will be treated as if the
fractional share interests were distributed as part of the Merger
and then redeemed by Meridian. Such cash payments will be
treated as having been received as distributions in full payment
in exchange for the fractional share interests redeemed, as
provided in IRC Section 302(a). Any gain or loss recognized by a
UCB shareholder will be a capital gain or loss, provided the
shares of UCB Common Stock are held as a capital asset on the
Effective Date of the Merger.
10. The Meridian Stock Purchase Rights transferred with
the shares of Meridian Common Stock will not constitute "other
property" within the meaning of IRC Section 356(a)(1)(B).
11. As provided in IRC Section 381(c)(2) and related
Treasury regulations, Meridian will succeed to and take into
account the earnings and profits, or deficit in earnings and
profits, of UCB as of the Effective Date of the Merger. Any
deficit in the earnings and profits of Meridian or UCB will be
used only to offset the earnings and profits accumulated after
the Merger.
12. Pursuant to IRC Section 381(a) and related Treasury
regulations, Meridian will succeed to and take into account the
items of UCB described in IRC Section 381(c). Such items will be
taken into account by Meridian subject to the conditions and
limitations of IRC Sections 381, 382, 383, and 384 and the
Treasury regulations thereunder.
13. The Bank Merger will constitute a reorganization
within the meaning of IRC Section 368(a)(1)(A).
14. UCTC and MBNJ will each be "a party to a
reorganization" within the meaning of IRC Section 368(b).
15. Neither UCTC nor MBNJ will recognize any gain or
loss upon the transfer of UCTC's assets to MBNJ in constructive
exchange solely for MBNJ Common Stock and the assumption by MBNJ
of the liabilities of UCTC.
16. The basis of the UCTC assets in the hands of MBNJ
will be the same as the basis of such assets in the hands of UCTC
immediately prior to the Bank Merger.
17. The holding period of the UCTC assets in the hands
of MBNJ will include the period during which such assets were
held by UCTC.
18. No gain or loss will be recognized by Meridian, as
the shareholder of UCTC, upon the constructive receipt of shares
of MBNJ Common Stock in exchange for the UCTC Common Stock
surrendered in exchange therefor in the Bank Merger.
19. The basis of the MBNJ Common Stock to be held by
Meridian after the Bank Merger will equal the basis of such stock
immediately before the Bank Merger, increased by the basis of the
UCTC Common Stock surrendered in the constructive exchange.
20. As provided in IRC Section 381(c)(2) and related
Treasury regulations, MBNJ will succeed to and take into account
the earnings and profits, or deficit in earnings and profits, of
UCTC as of the Effective Date of the Bank Merger. Any deficit in
the earnings and profits of MBNJ or UCTC will be used only to
offset the earnings and profits accumulated after the Bank
Merger.
21. Pursuant to IRC Section 381(a) and related Treasury
regulations, MBNJ will succeed to and take into account the items
of UCTC described in IRC Section 381(c). Such items will be
taken into account by MBNJ subject to the conditions and
limitations of IRC Sections 381, 382, 383, and 384 and the
Treasury regulations thereunder.<PAGE>
EXHIBIT 6
FORM OF OPINION
OF COUNSEL TO UCB
Meridian shall have received from counsel to UCB, an
opinion, dated as of the Closing Date, substantially to the
effect that, subject to normal exceptions and qualifications:
(a) UCB and UCTC have full corporate power to carry
out the transactions contemplated in the Agreement and the Bank
Plan of Merger (the "Plan"), respectively. The execution and
delivery of the Agreement and the Plan and the consummation of
the transactions contemplated thereunder have been duly and
validly authorized by all necessary corporate action on the part
of UCB and UCTC, and the Agreement and the Plan constitute valid
and legally binding obligations, in accordance with their
respective terms, of UCB and UCTC, respectively, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium,
receivership, conservatorship, and other laws affecting
creditors' rights generally and as may be limited by the exercise
of judicial discretion in applying principles of equity. Subject
to satisfaction of the conditions set forth in the Agreement,
neither the transactions contemplated in the Agreement and the
Pan, nor compliance by UCB and UCTC with any of the respective
provisions thereof, will (A) conflict with or result in a breach
or default under (i) the Articles of Incorporation or Bylaws of
UCB, or UCTC, or (ii) to the knowledge of such counsel, any note,
bond, mortgage, indenture, license, agreement or other instrument
or obligation to which UCB or UCTC is a party, or (B) result in
the creation or imposition of any material lien or encumbrance
upon the property of UCB or UCTC, except such material lien,
instrument or obligation as has been disclosed pursuant to the
Agreement and the Plan, or (C) violate in any material respect
any order, writ, injunction, or decree known to such counsel, or
any statute, rule or regulation applicable to UCB or UCTC.
(b) UCTC is a validly existing state-chartered
banking institution organized and in good standing under the laws
of the State of New Jersey. The deposits of UCTC are insured to
the maximum extent provided by law by the Federal Deposit
Insurance Corporation.
(c) There is no legal, administrative, arbitration
or governmental proceeding or investigation pending or, to the
knowledge of such counsel, threatened to which UCB or UCTC is a
party which would, if determined adversely to UCB or UCTC, have
a material adverse effect on the business, properties, results of
operations, or condition, financial or otherwise, of UCB or UCTC
or which questions the validity of the Agreement or the Plan, or
any other action to be taken by UCB or UCTC under the Agreement
and the Plan, respectively.
(d) No consent, approval, authorization, or order
of any federal or state court or federal or state governmental
agency or body is required for the consummation by UCB or UCTC of
the transactions contemplated by the Agreement and the Plan,
except for such consents, approvals, authorizations or orders as
have been obtained and except for consents or approvals under
state securities laws as to which we express no opinion.
(e) The mergers of Meridian and UCB and Meridian
Bank New Jersey and UCTC contemplated by the Agreement and the
Plan, respectively, have been effected in compliance with all
applicable federal and Pennsylvania and New Jersey laws and
regulations in all material respects.
(f) On the basis of such counsel's participation in
conferences with officers and employees of UCB in connection with
the preparation of the Prospectus/Proxy Statement and without
other independent investigation or inquiry, such counsel has no
reason to believe that (i) the Prospectus/Proxy Statement,
including any amendments or supplements thereto (except for the
financial information, financial statements, financial schedules
and other financial or statistical data contained therein and
except for any information supplied by Meridian for inclusion
therein, as to which counsel need express no belief), as of the
date of mailing thereof and as of the date of the meeting of
shareholders of UCB to approve the merger, contained any untrue
statement of a material fact or omitted to state a material fact
necessary to make any statement therein, in light of the
circumstances under which it was made, not misleading. Such
counsel may state that they have no independently verified and do
not assume any responsibility for the accuracy, completeness or
fairness of any information or statements contained in the
Prospectus/Proxy Statement, except with respect to identified
statements of law or regulations or legal conclusions relating to
UCB or UCTC or the transactions contemplated in the Agreement and
the Plan.<PAGE>
ANNEX B
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Stock Option
Agreement") dated May 23, 1995, is by and between MERIDIAN
BANCORP, INC., a Pennsylvania corporation ("Meridian"), and
UNITED COUNTIES BANCORPORATION, a New Jersey corporation ("UCB").
BACKGROUND
1. Meridian and UCB desire to enter into an
agreement, dated May 23, 1995 (the "Agreement"), providing, among
other things, for the merger of UCB and Meridian, with Meridian
surviving the merger (the "Merger").
2. As a condition of Meridian entering into the
Agreement on the terms and conditions relating to price set forth
in the Agreement, UCB is granting to Meridian an option to
purchase up to 375,000 shares of common stock of UCB, subject to
adjustment as provided in Section 5, on the terms and conditions
hereinafter set forth.
AGREEMENT
In consideration of the foregoing and the mutual
covenants and agreements set forth herein, Meridian and UCB,
intending to be legally bound hereby, agree:
1. Grant of Option. UCB hereby grants to
Meridian, on the terms and conditions set forth herein, the
option to purchase (the "Option") up to 375,000 shares (the
"Option Shares") of common stock, stated value $1.00 per share
(the "Common Stock"), of UCB, subject to adjustment as provided
in Section 5, at a price per share (the "Option Price") equal to
$125.00; provided, however, that in the event UCB issues or
agrees to issue (including through the issuance of any Rights (as
defined in the Agreement)) any shares of Common Stock, except for
shares issuable under outstanding stock options, at a price less
than $125.00 per share (as adjusted pursuant to Section 5 of this
Stock Option Agreement), such $125.00 per share price shall be
reduced to such lesser price.
2. Exercise of Option. Upon or after the
occurrence of a Triggering Event (as such term is hereinafter
defined) and until termination of this Stock Option Agreement in
accordance with the provisions of Section 21, Meridian may
exercise the Option, in whole or in part, at any time or one or
more times, from time to time. As used herein, the term
"Triggering Event" means the occurrence of any of the following
events:
(a) a person or group (as such terms are
defined in the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and
regulations thereunder), other than Meridian, an
affiliate of Meridian or any present shareholder of UCB
which or who presently owns more than 9.9% of the
presently outstanding shares of Common Stock, acquires
beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of more than 9.9% of the then
outstanding shares of Common Stock; provided, however
that a Triggering Event shall occur under this
Section 2(a) in the event any present shareholder of UCB
which or who presently owns more than 9.9% of the
presently outstanding shares of Common Stock increases
such shareholder's beneficial ownership to greater than
14.9% of the then outstanding shares of Common Stock;
(b) a person or group, other than Meridian or
an affiliate of Meridian, enters into an agreement or
letter of intent with UCB pursuant to which such person
or group or any affiliate of such person or group would
(i) merge or consolidate, or enter into any similar
transaction, with UCB or United Counties Trust Company
("UCTC"), (ii) acquire all or substantially all of the
assets of UCB or all or substantially all of the assets
or liabilities of UCTC, or (iii) acquire beneficial
ownership of securities representing, or the right to
acquire beneficial ownership or to vote securities
representing, more than 9.9% of the then outstanding
shares of Common Stock or the then outstanding shares of
common stock of UCTC; or
(c) a person or group, other than Meridian or
an affiliate of Meridian, publicly announces a bona fide
proposal (including a written communication that is or
becomes the subject of public disclosure) for (i) any
merger, consolidation or acquisition of all or
substantially all the assets of UCB or all or
substantially all of the assets or liabilities of UCTC,
or any other business combination involving UCB or UCTC,
or (ii) a transaction involving the transfer of
beneficial ownership of securities representing, or the
right to acquire beneficial ownership or to vote
securities representing, more than 9.9% of the then
outstanding shares of Common Stock, or any of the then
outstanding shares of common stock of UCTC (collectively,
a "Proposal"), and thereafter, if such Proposal has not
been Publicly Withdrawn (as such term is hereinafter
defined) at least 30 days prior to the meeting of
shareholders of UCB called to vote on the Merger, UCB's
shareholders fail to approve the Merger by the vote
required by applicable law at the meeting of shareholders
called for such purpose or such meeting has been
postponed or cancelled; or
(d) a person or group, other than Meridian or
an affiliate of Meridian, makes a bona fide Proposal and
thereafter, but before such Proposal has been Publicly
Withdrawn, UCB willfully takes any action in a manner
which would materially interfere with UCB's ability to
consummate the Merger or materially reduce the value of
the transaction to Meridian;
(e) UCB breaches the covenant set forth at
Section 4.06 of the Agreement; or
(f) UCB breaches, in any material respect, any
binding terms of the Agreement or any provision of this
Stock Option Agreement or the Agreement after a Proposal
is made and before it is Publicly Withdrawn or publicly
announces an intention to authorize, recommend or accept
any such Proposal; or
(g) any affiliate of UCB breaches any material
provision of the UCB Affiliate Agreement attached as
Exhibit 1 to the Merger Agreement or breaches in any
material respect the covenant set forth in Section 4.06
of the Agreement.
"Publicly Withdrawn" for purposes of this Section 2
shall mean an unconditional bona fide withdrawal of the Proposal
coupled with a public announcement of no further interest in
pursuing such Proposal or in acquiring any controlling influence
over UCB or in soliciting or inducing any other person (other
than Meridian or an affiliate of Meridian) to do so.
Notwithstanding the foregoing, the obligation of UCB
to issue Option Shares upon exercise of the Option shall be
deferred (but shall not terminate) (i) until the receipt of all
required governmental or regulatory approvals or consents
necessary for UCB to issue the Option Shares, or Meridian to
exercise the Option, or until the expiration or termination of
any waiting period required by law, or (ii) so long as any
injunction or other order, decree or ruling issued by any federal
or state court of competent jurisdiction is in effect which
prohibits the sale or delivery of the Option Shares, and, in each
case, notwithstanding any provision to the contrary set forth
herein, the Option shall not expire or otherwise terminate.
UCB shall notify Meridian promptly in writing of the
occurrence of any Triggering Event known to it, it being
understood that the giving of such notice by UCB shall not be a
condition to the right of Meridian to exercise the Option. UCB
will not take any action which would have the effect of
preventing or disabling UCB from delivering the Option Shares to
Meridian upon exercise of the Option or otherwise performing its
obligations under this Stock Option Agreement. In the event
Meridian wishes to exercise the Option, Meridian shall send a
written notice to UCB (the date of which is hereinafter referred
to as the "Notice Date") specifying the total number of Option
Shares it desires to purchase and a place and date between two
and ten business days inclusive from the Notice Date for the
closing of such a purchase (a "Closing"); provided, however, that
a Closing shall not occur prior to two days after the later of
receipt of any necessary regulatory approvals or the expiration
of any legally required notice or waiting period, if any.
3. Payment and Delivery of Certificates. At any
Closing hereunder, (a) Meridian will make payment to UCB of the
aggregate price for the Option Shares so purchased by wire
transfer of immediately available funds to an account designated
by UCB, (b) UCB will deliver to Meridian a stock certificate or
certificates representing the number of Option Shares so
purchased, registered in the name of Meridian or its designee, in
such denominations as were specified by Meridian in its notice of
exercise and bearing a legend as set forth below, and
(c) Meridian will pay any transfer or other taxes required by
reason of the issuance of the Option Shares so purchased.
A legend will be placed on each stock certificate
evidencing Option Shares issued pursuant to this Stock Option
Agreement, which legend will read substantially as follows:
"The shares of stock represented by this
certificate have not been the subject of a
registration statement filed under the Securities
Act of 1933, as amended (the "Act"), and declared
effective by the Securities and Exchange
Commission. These shares may not be sold,
transferred or otherwise disposed of prior to such
time unless United Counties Bancorporation
receives an opinion of counsel stating that an
exemption from the registration provisions of the
Act is available for such transfer."
4. Registration Rights. Upon or after the
occurrence of a Triggering Event and upon receipt of a written
request from Meridian, UCB shall promptly prepare and file a
registration statement under the Securities Act of 1933, as
amended, with the Securities and Exchange Commission covering the
Option and such number of Option Shares as Meridian shall specify
in its request, and UCB shall use its best efforts to cause such
registration statement to be declared effective in order to
permit the sale or other disposition of the Option or the Option
Shares, provided that Meridian shall in no event have the right
to have more than one such registration statement become
effective, and provided further that UCB shall not be required to
prepare and file any such registration statement in connection
with any proposed sale with respect to which UCB's counsel
delivers to UCB and to Meridian its unqualified opinion to the
effect that no such filing is required under applicable laws and
regulations with respect to such sale or disposition. In
connection with such filing, UCB shall use its best efforts to
cause to be delivered to Meridian such certificates, opinions,
accountant's letters and other documents as Meridian shall
reasonably request and as are customarily provided in connection
with registrations of securities under the Securities Act of
1933, as amended. UCB shall provide to Meridian such number of
copies of the preliminary prospectus and final prospectus and any
amendments and supplements thereto as Meridian may reasonably
request. All reasonable expenses incurred by UCB in complying
with the provisions of this Section 4, including, without
limitation, all registration and filing fees, reasonable printing
expenses, reasonable fees and disbursements of counsel for UCB
and blue sky fees and expenses, shall be paid by UCB.
Underwriting discounts and commissions to brokers and dealers
relating to the Option or the Option Shares, fees and
disbursements of counsel to Meridian and any other expenses
incurred by Meridian in connection with such filing shall be
borne by Meridian. In connection with such filing, UCB shall
indemnify and hold harmless Meridian against any losses, claims,
damages or liabilities, joint or several, to which Meridian may
become subject, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in any preliminary or final
registration statement or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; and UCB
will reimburse Meridian for any legal or other expense reasonably
incurred by Meridian in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that UCB will not be liable in any case to the
extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such
preliminary or final registration statement or such amendment or
supplement thereto in reliance upon and in conformity with
written information furnished by or on behalf of Meridian
specifically for use in the preparation thereof. Meridian will
indemnify and hold harmless UCB to the same extent as set forth
in the immediately preceding sentence but only with reference to
written information furnished by or on behalf of Meridian for use
in the preparation of such preliminary or final registration
statement or such amendment or supplement thereto; and Meridian
will reimburse UCB for any legal or other expense reasonably
incurred by UCB in connection with investigating or defending any
such loss, claim, damage, liability or action.
5. Adjustment Upon Changes in Capitalization. In
the event of any change in the Common Stock by reason of stock
dividends, split-ups, mergers, recapitalizations, combinations,
conversions, divisions, exchanges of shares or the like, then the
number and kind of Option Shares and the Option Price shall be
appropriately adjusted.
6. Filings and Consents. Each of Meridian and UCB
will use its best efforts to make all filings with, and to obtain
consents of, all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by
this Stock Option Agreement.
7. Representations and Warranties of UCB. UCB
hereby represents and warrants to Meridian as follows:
(a) Due Authorization. UCB has full corporate
power and authority to execute, deliver and perform this
Stock Option Agreement and all corporate action necessary
for execution, delivery and performance of this Stock
Option Agreement has been duly taken by UCB. This Stock
Option Agreement constitutes a legal, valid and binding
obligation of UCB, enforceable against UCB in accordance
with its terms.
(b) Authorized Shares. UCB has taken all
necessary corporate action to authorize and reserve for
issuance all shares of Common Stock which may be issued
pursuant to any exercise of the Option.
8. Specific Performance. The parties hereto
acknowledge that damages would be an inadequate remedy for a
breach of this Stock Option Agreement and that the obligations of
the parties hereto shall be specifically enforceable.
9. Entire Agreement. This Stock Option Agreement
and the Agreement constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede
all other prior agreements and understandings, both written and
oral, among the parties or any of them with respect to the
subject matter hereof.
10. Assignment or Transfer. Meridian represents
that it is acquiring the Option for Meridian's own account and
not with a view to, or for sale in connection with, any
distribution of the Option or the Option Shares. Meridian is
aware that neither the Option nor the Option Shares are the
subject of a registration statement filed with, and declared
effective by, the Securities and Exchange Commission pursuant to
Section 5 of the Securities Act of 1933, as amended, but instead
are being offered in reliance upon the exemption from the
registration requirement provided by Section 4(2) thereof.
11. Amendment of Stock Option Agreement. By mutual
consent of the parties hereto, this Stock Option Agreement may be
amended in writing at any time, for the purpose of facilitating
performance hereunder or to comply with any applicable regulation
of any governmental authority or any applicable order of any
court or for any other purpose.
12. Validity. The invalidity or unenforceability
of any provision of this Stock Option Agreement shall not affect
the validity or enforceability of any other provisions of this
Stock Option Agreement, which shall remain in full force and
effect.
13. Notices. All notices, requests, consents and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when
delivered personally, by telegram or telecopy, or by registered
or certified mail (postage prepaid, return receipt requested) to
the respective parties as follows:
(i) If to Meridian, to:
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, Pennsylvania 19603
Attention: David E. Sparks, Chief
Financial
Officer
and
Michael J. Hughes
Senior Vice President,
Corporate Development
Telecopy No.: (610) 665-2428
with a copy to:
Stevens & Lee
111 North Sixth Street
Reading, Pennsylvania 19601
Attention: Joseph M. Harenza, Esquire,
and
David W. Swartz, Esquire
Telecopy No.: (610) 376-5610
(ii) If to UCB, to:
United Counties Bancorporation
Four Commerce Drive
Cranford, New Jersey 07016
Attention: Eugene H. Bauer
Chairman of the Board and
Chief Executive Officer
and
Alice Cadby,
Corporate Secretary
Telecopy No.: (908) 709-1583
(Marked "Confidential")
with copies to:
Pitney, Hardin, Kipp & Szuch
Mail: P.O. Box 1945
Morristown, New Jersey 07962-1945
Street: 200 Campus Drive
Florham Park, New Jersey 07932-8950
Attention: Ronald Janis, Esquire
Telecopy No.: (201) 966-1550
or to such other address as the person to whom notice is to be
given may have previously furnished to the others in writing in
the manner set forth above (provided that notice of any change of
address shall be effective only upon receipt thereof).
14. Governing Law. This Stock Option Agreement
shall be governed by and construed in accordance with the
domestic internal law (but not the law of conflicts of law) of
the Commonwealth of Pennsylvania.
15. Captions. The captions in this Stock Option
Agreement are inserted for convenience and reference purposes,
and shall not limit or otherwise affect any of the terms or
provisions hereof.
16. Waivers and Extensions. The parties hereto
may, by mutual consent, extend the time for performance of any of
the obligations or acts of either party hereto. Each party may
waive (i) compliance with any of the covenants of the other party
contained in this Stock Option Agreement and/or (ii) the other
party's performance of any of its obligations set forth in this
Stock Option Agreement.
17. Parties in Interest. This Stock Option
Agreement shall be binding upon and inure solely to the benefit
of each party hereto, and nothing in this Stock Option Agreement,
express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by
reason of this Stock Option Agreement.
18. Counterparts. This Stock Option Agreement may
be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one
and the same agreement.
19. Expenses. Except as otherwise provided herein,
all costs and expenses incurred by the parties hereto in
connection with the transactions contemplated by this Stock
Option Agreement or the Option shall be paid by the party
incurring such cost or expense.
20. Representations Relating to Authorizations.
UCB and Meridian each represent and warrant that executions,
delivery and performance of this agreement have been authorized
by their respective boards of directors and constitutes a legal
and valid obligation enforceable in accordance with its terms.
21. Termination. This Stock Option Agreement shall
terminate and be of no further force or effect upon termination
of the Agreement in accordance with the provisions thereof;
provided, however, that, if the termination of the Agreement
occurs after a Triggering Event, this Stock Option Agreement
shall not terminate until expiration of twelve (12) months
following the later of the termination of the Agreement or the
completion or abandonment of any Proposal or any acquisition
transaction relating to the Triggering Event.
22. Severability. If any term, provision, covenant
or restriction contained in this Stock Option Agreement is held
by a court or a federal or state regulatory agency of competent
jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions and covenants and restrictions contained
inn this Option Agreement shall remain in full force and effect,
and shall in no way be affected, impaired or invalidated. If for
any reason such court or regulatory agency determines that the
Option will not permit the holder to acquire the full number of
shares of the Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6 hereof), it is the express
intention of UCB to allow the holder to acquire such lesser
number of shares as may be permissible at such lesser price or on
such other repurchase terms as such court or regulatory agency
may indicate to be reasonable, without any amendment or
modification hereof.
IN WITNESS WHEREOF, each of the parties hereto,
pursuant to resolutions adopted by its Board of Directors, has
caused this Stock Option Agreement to be executed by its duly
authorized officer and has caused its corporate seal to be
affixed hereunto and to be duly attested, all as of the day and
year first above written.
MERIDIAN BANCORP, INC.
By /s/Samuel A. McCullough
Samuel A. McCullough,
Chairman and
Chief Executive Officer
(CORPORATE SEAL)
Attest: /s/William L. Gaunt
William L. Gaunt,
Secretary
UNITED COUNTIES BANCORPORATION
By /s/Donald S. Nowicki
Donald S. Nowicki,
President
(CORPORATE SEAL)
Attest: /s/Alice Cadby
Alice Cadby,
Secretary
<PAGE>
ANNEX C
OPINION OF GOLDMAN, SACHS & CO.<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Pennsylvania law provides that a Pennsylvania corporation
may indemnify directors, officers, employees and agents of the
corporation against liabilities they may incur in such capacities
for any action taken or any failure to act, whether or not the
corporation would have the power to indemnify the person under
any provision of law, unless such action or failure to act is
determined by a court to have constituted recklessness or willful
misconduct. Pennsylvania law also permits the adoption of a
bylaw amendment, approved by shareholders, providing for the
elimination of a director's liability for monetary damages for
any action taken or any failure to take any action unless (1) the
director has breached or failed to perform the duties of his
office and (2) the breach or failure to perform constitutes
self-dealing, willful misconduct or recklessness.
The bylaws of Meridian provide for (1) indemnification of
directors, officers, employees and agents of the registrant and
its subsidiaries and (2) the elimination of a director's
liability for monetary damages, to the fullest extent permitted
by Pennsylvania law.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by Meridian.
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits.
2.1 Agreement and Plan of Merger dated as of May 23,
1995, between Meridian Bancorp, Inc. and United
Counties Bancorporation (included as Annex A to the
Proxy Statement/Prospectus). Schedules are omitted;
Meridian Bancorp, Inc. agrees to furnish copies of
such schedules to the Commission upon request.
2.2 Stock Option Agreement, dated May 23, 1995, between
Meridian Bancorp, Inc. and United Counties
Bancorporation (included as Annex B to the Proxy
Statement/Prospectus).
2.4 Bank Plan of Merger, dated as of May 23, 1995,
between Meridian Bank, New Jersey and United
Counties Trust Company (included as Exhibit 3 to
Annex A to the Proxy Statement/Prospectus).
3.1 Articles of Incorporation of Meridian Bancorp, Inc.,
as amended (incorporated herein by reference to
Exhibit 3.1 to the Annual Report on Form 10-K of
Meridian Bancorp, Inc. for the year ended
December 31, 1994).
3.2 Bylaws of Meridian Bancorp, Inc., as amended
(incorporated herein by reference to Exhibit 3.2 to
the Annual Report on Form 10-K of Meridian Bancorp,
Inc. for the year ended December 31, 1991).
4.1 Rights Agreement dated July 25, 1989, between
Meridian Bancorp, Inc. and Meridian Bank, as Rights
Agent (incorporated herein by reference to the
Registration Statement on Form 8-A of Meridian
Bancorp, Inc. filed August 14, 1989).
4.2 Amendment to Rights Agreement, dated as of June 28,
1994, between Meridian Bancorp, Inc. and Meridian
Trust Company, as Rights Agent, incorporated herein
by reference to Exhibit 2.2 of Amendment No. 1,
filed July 25, 1994, to the Registration Statement
on Form 8-A of the Registrant, filed August 14,
1989.
4.3 Meridian Bancorp, Inc. has outstanding long-term
debt which does not exceed 10% of the total assets
of Meridian Bancorp, Inc. and its consolidated
subsidiaries; therefore, copies of the constituent
instruments defining the rights of the holders of
such debt are not included as exhibits to this
Registration Statement. Meridian Bancorp, Inc.
agrees to furnish copies of such instruments to the
Commission upon request.
5.1 Opinion of Stevens & Lee re: Legality of Common
Stock.
8.1 Form of Opinion of Stevens & Lee re: Tax Matters.
23.1 Consent of KPMG Peat Marwick LLP as to consolidated
financial statements of Meridian Bancorp, Inc. as of
December 31, 1994 and 1993 and for each of the years
in the three-year period ended December 31, 1994.
23.2 Consent of KPMG Peat Marwick LLP as to consolidated
financial statements of United Counties
Bancorporation as of December 31, 1994 and 1993 and
for each of the three years in the three year period
ended December 31, 1994.
23.3 Consent of Stevens & Lee (contained in Exhibit 5).
23.4 Consent of Stevens & Lee (contained in Exhibit 8.1).
24.1 Powers of Attorney of Directors and Officers
(included on signature page hereof).
99.1 Opinion of Goldman, Sachs & Co., dated August __,
1995 (included as Annex C to the Proxy
Statement/Prospectus).*
99.2 Form of Proxy for the Special Meeting of
Stockholders of United Counties Bancorporation.
99.3 Employment agreement, dated September 9, 1993, by
and between United Counties Bancorporation, United
Counties Trust Company and Eugene H. Bauer
(incorporated herein by reference to Exhibit I to
the Current Report on Form 8-K dated September 22,
1993 of United Counties Bancorporation).
99.4 Agreement dated May 23, 1995 between Eugene H. Bauer
and United Counties Bancorporation.
_______________________
*To be filed by amendment.<PAGE>
(b) Financial Statement Schedules.
None required. Applicable schedules are included in
documents incorporated herein by reference.
Item 22. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any fact or
events arising after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with
respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the prospectus, to each
person to whom the prospectus is sent or given, the latest annual
report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not
set forth in the prospectus, to deliver, or cause to be delivered
to each person to whom the prospectus is sent or given, the
latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial
information.
(c) (1) The undersigned registrant hereby undertakes as
follows: that prior to any public reoffering of the
securities registered hereunder through use of a
prospectus which is a part of this registration
statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer
undertakes that such reoffering prospectus will contain
the information called for by the applicable registration
form with respect to reofferings by persons who may be
deemed underwriters, in addition to the information
called for by the other Items of the applicable form.
(2) The registrant undertakes that every prospectus
(i) that is filed pursuant to paragraph (1) immediately
preceding, or (ii) that purports to meet the requirements
of section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will
be filed as a part of an amendment to the registration
statement and will not be used until such amendment is
effective, and that, for purposes of determining any
liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(d) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the bylaws of the registrant, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(e) The undersigned registrant hereby undertakes to
respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11, or
13 of this Form, within one business day of receipt of such
request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of
the registration statement through the date of responding to the
request.
(f) The undersigned registrant hereby undertakes to
supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the
registration statement when it became effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Reading, Commonwealth
of Pennsylvania, on August 29, 1995.
MERIDIAN BANCORP, INC.
(Registrant)
By:/s/Samuel A. McCullough
Samuel A. McCullough,
Chairman and Chief
Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Samuel A.
McCullough and David E. Sparks, and each of them, his true and
lawful attorney-in-fact, as agent with full power of substitution
and resubstitution for him and in his name, place and stead, in
any and all capacity, to sign any or all amendments to this
Registration Statement and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto such
attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully and to all intents
and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act
of 1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ Samuel A. McCullough Chairman, Chief August 29, 1995
Samuel A. McCullough Executive Officer
and Director
(Principal
Executive Officer)
/s/ David E. Sparks Vice Chairman, August 29, 1995
David E. Sparks Chief Financial
Officer and
Director
(Principal
Financial Officer)
/s/ Michael J. Mizak, Jr. Senior Vice August 29, 1995
Michael J. Mizak, Jr. President
(Principal
Accounting
Officer)
/s/ Delight E. Breidegam, Jr. Director August 28, 1995
DeLight E. Breidegam, Jr.
/s Thomas F. Burke, Jr. Director August 28, 1995
Thomas F. Burke, Jr.
/s/ Robert W. Cardy Direct August 29, 1995
Robert W. Cardy
_____________________________ Director August __, 1995
Harry Corless
/s/ William D. Davis Director August 28, 1995
William D. Davis
_____________________________ Director August __, 1995
Julius W. Erving
/s/ Fred D. Hafer Director August 30, 1995
Fred D. Hafer
____________________________ Director August __, 1995
Lawrence C. Karlson
____________________________ Director August __, 1995
Ezekiel S. Ketchum
/s/ Sidney D. Kline, Jr. Director August 30, 1995
Sidney D. Kline, Jr.
/s/ George W. Leighow Director August 28, 1995
George W. Leighow
/s/ Joseph F. Paquette, Jr. Director August 28, 1995
Joseph F. Paquette, Jr.
/s/ Daniel H. Polett Director August 28, 1995
Daniel H. Polett
/s/ Lawrence R. Pugh Director August 30, 1995
Lawrence R. Pugh
____________________________ Director August __, 1995
Paul R. Roedel
/s/ Wilmer R. Schultz Director August 28, 1995
Wilmer R. Schultz
/s/ Robert B. Seidel Director August 28, 1995
Robert B. Seidel
/s/ Judith M. von Seldenick Director August 30, 1995
Judith M. von Seldeneck
/s/ George Strawbridge, Jr. Director August 29, 1995
George Strawbridge, Jr.
/s/ Anita A. Summers Director August 31, 1995
Anita A. Summers
/s/ Earle A. Wootton Director August 30, 1995
Earle A. Wootton<PAGE>
EXHIBIT INDEX
Item 21. Exhibits and Financial Statement Schedules.
(a) Exhibits.
2.1 Agreement and Plan of Merger dated as of May 23,
1995, between Meridian Bancorp, Inc. and United
Counties Bancorporation (included as Annex A to the
Proxy Statement/Prospectus). Schedules are omitted;
Meridian Bancorp, Inc. agrees to furnish copies of
such schedules to the Commission upon request.
2.2 Stock Option Agreement, dated May 23, 1995, between
Meridian Bancorp, Inc. and United Counties
Bancorporation (included as Annex B to the Proxy
Statement/Prospectus).
2.4 Bank Plan of Merger, dated as of May 23, 1995,
between Meridian Bank, New Jersey and United
Counties Trust Company (included as Exhibit 3 to
Annex A to the Proxy Statement/Prospectus).
3.1 Articles of Incorporation of Meridian Bancorp, Inc.,
as amended (incorporated herein by reference to
Exhibit 3.1 to the Annual Report on Form 10-K of
Meridian Bancorp, Inc. for the year ended
December 31, 1994).
3.2 Bylaws of Meridian Bancorp, Inc., as amended
(incorporated herein by reference to Exhibit 3.2 to
the Annual Report on Form 10-K of Meridian Bancorp,
Inc. for the year ended December 31, 1991).
4.1 Rights Agreement dated July 25, 1989, between
Meridian Bancorp, Inc. and Meridian Bank, as Rights
Agent (incorporated herein by reference to the
Registration Statement on Form 8-A of Meridian
Bancorp, Inc. filed August 14, 1989).
4.2 Amendment to Rights Agreement, dated as of June 28,
1994, between Meridian Bancorp, Inc. and Meridian
Trust Company, as Rights Agent, incorporated herein
by reference to Exhibit 2.2 of Amendment No. 1,
filed July 25, 1994, to the Registration Statement
on Form 8-A of the Registrant, filed August 14,
1989.
4.3 Meridian Bancorp, Inc. has outstanding long-term
debt which does not exceed 10% of the total assets
of Meridian Bancorp, Inc. and its consolidated
subsidiaries; therefore, copies of the constituent
instruments defining the rights of the holders of
such debt are not included as exhibits to this
Registration Statement. Meridian Bancorp, Inc.
agrees to furnish copies of such instruments to the
Commission upon request.
5.1 Opinion of Stevens & Lee re: Legality of Common
Stock.
8.1 Form of Opinion of Stevens & Lee re: Tax Matters.
23.1 Consent of KPMG Peat Marwick LLP as to consolidated
financial statements of Meridian Bancorp, Inc. as of
December 31, 1994 and 1993 and for each of the years
in the three-year period ended December 31, 1994.
23.2 Consent of KPMG Peat Marwick LLP as to consolidated
financial statements of United Counties
Bancorporation as of December 31, 1994 and 1993 and
for each of the three years in the three year period
ended December 31, 1994.
23.3 Consent of Stevens & Lee (contained in Exhibit 5).
23.4 Consent of Stevens & Lee (contained in Exhibit 8.1).
24.1 Powers of Attorney of Directors and Officers
(included on signature page hereof).
99.1 Opinion of Goldman, Sachs & Co., dated August __,
1995 (included as Annex C to the Proxy
Statement/Prospectus).*
99.2 Form of Proxy for the Special Meeting of
Stockholders of United Counties Bancorporation.
99.3 Employment Agreement, dated September 9, 1993, by
and between United Counties Bancorporation, United
Counties Trust Company and Eugene H. Bauer
(incorporated herein by reference to Exhibit I to
the Current Report on Form 8-K dated September 22,
1993 of United Counties Bancorporation).
99.4 Agreement dated May 23, 1995 between Eugene H. Bauer
and United Counties Bancorporation.
_______________________
*To be filed by amendment.
EXHIBIT 5.1
August 31, 1995
Board of Directors
Meridian Bancorp, Inc.
35 North Sixty Street
Reading, Pennsylvania 19601
Re: Registration Statement on Form S-4
United Counties Bancorporation
Ladies and Gentlemen:
In connection with the proposed offering of up to 10,954,185
shares of common stock, par value $5.00 per share (the "Common
Stock"), by Meridian Bancorp, Inc. (the "Company"), covered by
the Company's Registration Statement on Form S-4 (the
"Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, with
respect to such Common Stock, we, as special counsel to the
Company, have reviewed:
(1) The Articles of Incorporation of the Company;
(2) The Bylaws of the Company;
(3) The minute books of the Company;
(4) The Registration Statement; and
(5) Copies of the certificates representing shares of the
Common Stock.
Based upon our review of the foregoing, it is our opinion
that:
(a) the Company has been duly incorporated under the laws
of the Commonwealth of Pennsylvania and is validly existing and
in good standing under the laws of such Commonwealth; and
(b) the Common Stock covered by the Registration Statement
has been duly authorized and, when issued pursuant to the terms
described in the Registration Statement, will be legally issued
by the Company and fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to us under the
heading "LEGAL MATTERS" in the related Prospectus. In giving
this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
STEVENS & LEE
/s/ Stevens & Lee
EXHIBIT 8.1
__________, 1995
Board of Directors
Meridian Bancorp, Inc.
35 North Sixth Street
Reading, PA 19601
Board of Directors
United Counties Bancorporation
Four Commerce Drive
Cranford, NJ 07016
Re: Merger of United Counties Bancorporation with and into
Meridian Bancorp, Inc.; Merger of United Counties Trust
Company with and into Meridian Bank, New Jersey
Ladies and Gentlemen:
You have requested our opinion in connection with the
transaction contemplated by the Agreement and Plan of Merger (the
"Holding Company Merger Agreement") dated as of May 23, 1995
between Meridian Bancorp, Inc., a Pennsylvania corporation
("Meridian"), and United Counties Bancorporation, a New Jersey
corporation ("UCB"), pursuant to which UCB will be merged with
and into Meridian, which will be the surviving corporation. At
the Effective Date of such merger (the "Merger"), each share of
UCB Common Stock issued and outstanding immediately prior to such
date will, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into the right to
receive 5.0 shares of Meridian Common Stock, subject to possible
adjustment as provided in Section 1.02(e) of the Holding Company
Merger Agreement. In the event of such adjustment, no fractional
shares of Meridian Common Stock will be issued. In lieu thereof,
shareholders of UCB will receive cash in an amount determined
pursuant to Section 1.02(e) of the Holding Company Merger
Agreement. UCB's shareholders will not be entitled to exercise
dissenters' rights in connection with the Merger. All shares of
UCB Common Stock held as treasury shares by UCB or held by an UCB
Subsidiary, Meridian, or a Meridian Subsidiary on the Effective
Date of the Merger will be cancelled, and no shares of Meridian
Common Stock or other property will be delivered in exchange
therefor. Attached to and trading with each share of Meridian
Common Stock are certain "poison pill" rights (the "Rights")
issued pursuant to the Meridian Rights Agreement.
You have also requested our opinion in connection with the
transaction contemplated by the Bank Plan of Merger dated as of
May 23, 1995 between Meridian Bank, New Jersey, a New Jersey
banking corporation ("MBNJ"), and United Counties Trust Company,
a New Jersey banking corporation ("UCTC"), and as amended as of
_________, 1995, pursuant to which UCTC will, concurrently with
or as soon as practicable after the closing of the Merger of UCB
with and into Meridian, be merged with and into MBNJ, which will
be the surviving bank. At the effective date of such merger (the
"Bank Merger"), all of the issued and outstanding shares of UCTC
Common Stock and all shares of UCTC Common Stock held as treasury
shares will be cancelled, and no shares of MBNJ Common Stock will
be delivered in exchange therefor.
This opinion is being furnished pursuant to Sections 5.01(i)
and 5.02(i) of the Holding Company Merger Agreement. All
capitalized terms herein, unless otherwise specified, have the
meanings assigned thereto in the Holding Company Merger Agreement
and its exhibits.
In connection with our opinion, we have examined and are
familiar with originals or copies, certified or otherwise
identified to our satisfaction, of the Holding Company Merger
Agreement, the exhibits thereto, and such other documents as we
have deemed necessary or appropriate for the opinions set forth
below. In our examination, we have assumed the genuineness of
all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and
the authenticity of such latter documents. As to any facts
material to this opinion which we did not independently establish
or verify, we have relied upon the foregoing documents and upon
statements and representations of officers and other
representatives of UCB and Meridian, including certain written
representations of the managements of UCB and Meridian annexed
hereto. The opinions expressed herein are conditioned on the
initial and continuing accuracy of the facts, information, and
representations contained in the aforesaid documents or otherwise
referred to above.
In preparing our opinion, we have considered applicable
provisions of the IRC, Treasury regulations, pertinent judicial
authorities, interpretive rulings of the Internal Revenue
Service, and such other authorities as we have deemed relevant.
Based solely upon the foregoing and upon the assumptions set
forth herein, and subject to the qualifications and caveats set
forth herein, we are of the opinion that, under present law, for
federal income tax purposes:
1. The Merger, pursuant to which UCB will transfer all of
its assets to Meridian in exchange for Meridian Common Stock
(including any fractional share interests) and the assumption by
Meridian of all of UCB's liabilities, will constitute a
reorganization within the meaning of IRC Section 368(a)(1)(A).
2. UCB and Meridian will each be "a party to a
reorganization" within the meaning of IRC Section 368(b).
3. Neither UCB nor Meridian will recognize any gain or
loss upon the transfer of UCB's assets to Meridian in exchange
solely for Meridian Common Stock (including any fractional share
interests) and the assumption by Meridian of the liabilities of
UCB.
4. The basis of the UCB assets in the hands of Meridian
will be the same as the basis of such assets in the hands of UCB
immediately prior to the Merger.
5. The holding period of the assets of UCB to be received
by Meridian will include the period during which the assets were
held by UCB.
6. No gain or loss will be recognized by the shareholders
of UCB on the receipt of Meridian Common Stock (including any
fractional share interests) solely in exchange for their shares
of UCB Common Stock.
7. The basis of the Meridian Common Stock (including any
fractional share interests) to be received by the UCB
shareholders in the Merger will be the same as the basis of the
UCB Common Stock surrendered in exchange therefor.
8. The holding period of the Meridian Common Stock
(including any fractional share interests) to be received by the
UCB shareholders in the Merger will include the period during
which the UCB shareholders held their UCB Common Stock, provided
the shares of UCB Common Stock are held as a capital asset on the
Effective Date of the Merger.
9. The payment of cash in lieu of fractional share
interests of Meridian Common Stock will be treated as if the
fractional share interests were distributed as part of the Merger
and then redeemed by Meridian. Such cash payments will be
treated as having been received as distributions in full payment
in exchange for the fractional share interests redeemed, as
provided in IRC Section 302(a). Any gain or loss recognized by a
UCB shareholder will be a capital gain or loss, provided the
shares of UCB Common Stock are held as a capital asset on the
Effective Date of the Merger.
10. The Meridian Stock Purchase Rights transferred with the
shares of Meridian Common Stock will not constitute "other
property" within the meaning of IRC Section 356(a)(1)(B).
11. As provided in IRC Section 381(c)(2) and related
Treasury regulations, Meridian will succeed to and take into
account the earnings and profits, or deficit in earnings and
profits, of UCB as of the Effective Date of the Merger. Any
deficit in the earnings and profits of Meridian or UCB will be
used only to offset the earnings and profits accumulated after
the Merger.
12. Pursuant to IRC Section 381(a) and related Treasury
regulations, Meridian will succeed to and take into account the
items of UCB described in IRC Section 381(c). Such items will be
taken into account by Meridian subject to the conditions and
limitations of IRC Sections 381, 382, 383, and 384 and the
Treasury regulations thereunder.
13. The Bank Merger will constitute a reorganization within
the meaning of IRC Section 368(a)(1)(A).
14. UCTC and MBNJ will each be "a party to a
reorganization" within the meaning of IRC Section 368(b).
15. Neither UCTC nor MBNJ will recognize any gain or loss
upon the transfer of UCTC's assets to MBNJ in constructive
exchange solely for MBNJ Common Stock and the assumption by MBNJ
of the liabilities of UCTC.
16. The basis of the UCTC assets in the hands of MBNJ will
be the same as the basis of such assets in the hands of UCTC
immediately prior to the Bank Merger.
17. The holding period of the UCTC assets in the hands of
MBNJ will include the period during which such assets were held
by UCTC.
18. No gain or loss will be recognized by Meridian, as the
shareholder of UCTC, upon the constructive receipt of shares of
MBNJ Common Stock in exchange for the UCTC Common Stock
surrendered in exchange therefor in the Bank Merger.
19. The basis of the MBNJ Common Stock to be held by
Meridian after the Bank Merger will equal the basis of such stock
immediately before the Bank Merger, increased by the basis of the
UCTC Common Stock surrendered in the constructive exchange.
20. As provided in IRC Section 381(c)(2) and related
Treasury regulations, MBNJ will succeed to and take into account
the earnings and profits, or deficit in earnings and profits, of
UCTC as of the Effective Date of the Bank Merger. Any deficit in
the earnings and profits of MBNJ or UCTC will be used only to
offset the earnings and profits accumulated after the Bank
Merger.
21. Pursuant to IRC Section 381(a) and related Treasury
regulations, MBNJ will succeed to and take into account the items
of UCTC described in IRC Section 381(c). Such items will be
taken into account by MBNJ subject to the conditions and
limitations of IRC Sections 381, 382, 383, and 384 and the
Treasury regulations thereunder.
We call your attention to the fact that certain portions of
this opinion relating to the federal income tax treatment of UCB
shareholders may not be applicable to persons who received their
UCB Common Stock pursuant to the exercise of employee stock
options or otherwise as compensation, or to foreign persons or
persons who, because of their circumstances or status, are
subject to special federal income tax treatment.
Except as set forth above, we express no other opinion as to
the tax consequences of the mergers and related transactions to
any party under federal, state, local or foreign laws.
Very truly yours,
STEVENS & LEE
Exhibit 23.1
The Board of Directors
Meridian Bancorp, Inc.
We consent to the use of our report incorporated herein by
reference and to the reference to our firm under the heading
"Experts" in the registration statement. The report of KPMG Peat
Marwick LLP covering the aforementioned financial statements
contains an explanatory paragraph which discusses that the
Company adopted the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards
No. 115, Accounting for Certain Investments in Debt and Equity
Securities, and No. 112, Employers' Accounting for Postemployment
Benefits, in 1994 and No. 106, Employers' Accounting
Postretirement Benefits Other Than Pensions, and No. 109,
Accounting for Income Taxes, in 1993.
/s/ KPMG PEAT MARWICK LLP
August 30, 1995
Philadelphia, PA
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
United Counties Bancorporation:
We consent to the incorporation by reference of our report dated
January 13, 1995, relating to the consolidated balance sheets of
United Counties Bancorporation as of December 31, 1994 and 1993,
and the related consolidated statements of income, stockholders'
equity, and cash flow for each of the years in the three-year
period ended December 31, 1994, which report is incorporated by
reference in United Counties Bancorporation's 1994 Annual Report
on Form 10-K, and to the reference to our Firm under the heading
"Experts" in the Registration Statement of Meridian Bancorp, Inc.
Our report refers to a change in the method of accounting for
certain investments in debt and equity securities in 1994, income
taxes in 1993, and postretirement benefits other than pensions in
1992.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Short Hills, New Jersey
August 29, 1995
EXHIBIT 99.2
UNITED COUNTIES BANCORPORATION
Four Commerce Drive, Cranford, New Jersey 07016
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Eugene H. Bauer, William C.
Johnson, Jr., and Henry G. Largey, and as alternate John E.
Holobinko, should a vacancy prevent a quorum among the preceding,
and each of them, true and lawful attorneys, agents, and proxies,
with power of substitution to each of them, to vote all the
shares of common stock of United Counties Bancorporation held of
record by the undersigned on September 15, 1995, at the Special
Meeting of Stockholders to be held on November 1, 1995, at
10:00 a.m. at Four Commerce Drive, Cranford, New Jersey, and at
any adjournment thereof. The undersigned hereby revokes any and
all proxies heretofore given with respect to such meeting.
1. To approve the adoption of the proposed Agreement and Plan
of Merger (the "Agreement") dated May 23, 1995, between Meridian
Bancorp, Inc. ("Meridian"), Reading, Pennsylvania, and United
Counties Bancorporation ("UCB"), Cranford, New Jersey whereby UCB
will be merged with and into Meridian. Under the terms of the
Agreement, each share of UCB common stock outstanding will be
converted into and become a right to receive 5.00 shares of
Meridian common stock.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. To adjourn the Meeting to permit further solicitation of
proxies in the event there are insufficient votes at the Meeting
to constitute a quorum or to approve the Agreement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(Continued and to be signed on the other side)
3. In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREON BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED "FOR" THE ADOPTION OF THE
AGREEMENT AND PLAN OF MERGER AND "FOR" ADJOURNMENT OF THE MEETING
IN THE EVENT THE FURTHER SOLICITATION OF PROXIES IS NECESSITATED
TO PROCURE A QUORUM OR TO APPROVE THE AGREEMENT AND PLAN OF
MERGER.
Stockholder Number ___________ Number of Shares________
Date______
___________________________________
Signature
___________________________________
Signature
Please date sign as name appears on
left. If shares are held jointly,
both stockholders should sign. If
acting in the capacity of Executor,
Administrator, Trustee, Guardian,
etc., a signer should so indicate.
If proxy is submitted by a
corporation or partnership, its
complete name should be entered
above the signature(s) and title(s)
of the duly authorized officer(s)
or partner(s).
IMPORTANT: To assure your representation at the meeting, please
mark, date, sign, and mail this proxy promptly in the envelope
provided.
EXHIBIT 99.4
AGREEMENT
AGREEMENT, dated May 23, 1995, by and between Eugene H.
Bauer (the "Executive") and United Counties Bancorporation, a New
Jersey corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company and the Executive are parties to
an Employment Agreement, dated September 9, 1993 (the "Employment
Agreement"), pursuant to which, among other things, the Company
has agreed to employ the Executive as the Chairman of the Board
and Chief Executive Officer of the Company; and
WHEREAS, the Company has entered into an Agreement and
Plan of Merger dated as of May 23, 1995 (the "Merger Agreement"),
with Meridian Bancorp, Inc. ("Meridian"), which provides, among
other things, for the merger of the Company with and into
Meridian (the "Merger"); and
WHEREAS, under the terms of the Employment Agreement,
the Merger will constitute a "Change in Control" as defined in
the Employment Agreement; and
WHEREAS, the parties hereto wish to set forth the
consequences of the Merger under the terms of the Employment
Agreement and, in certain respects, to modify and/or supplement
the rights of the Executive as provided therein; and
WHEREAS, the Company wishes to retain the Executive as
a consultant following the Closing Date on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual
covenants contained herein, and intending to be legally bound,
the parties hereto agree as follows:
Section 1. Resignation. Effective as of the Closing
Date, the Executive hereby resigns all positions with the Company
and any of its subsidiaries or affiliates he now holds or may
hereafter be elected or appointed to, whether as an officer,
director, trustee or otherwise. For all purposes specified in
the Employment Agreement, such resignation shall constitute a
resignation for "Good Reason."
Section 2. Change in Control Payment. Upon the
Closing Date, the Company shall pay to the Executive the amounts
specified in Section 4.3(c) of the Employment Agreement. For
purposes of calculating the amount of such payment, the
Executive's annual "Base Salary" shall be deemed to be $382,000
and the Executive's annual incentive compensation shall be deemed
to be $130,000.
Section 3. Profit Sharing Settlement. The Executive
shall be considered a "Participant" in the Company's Profit
Sharing Plan (the "Profit Plan") for purposes of having credited
to his Profit Plan Account his proportionate share of any Company
contribution to the Profit Plan for the year in which the Profit
Plan is terminated and shall be treated consistently with other
participants in the Profit Plan as set forth in the Merger
Agreement. Following the crediting of such share, the Company
shall pay the entire amount of the Executive's Accounts under the
Profit Plan in a direct rollover to such eligible retirement plan
as the Executive may specify.
Section 4. Settlement of Stock Options. The Company
acknowledges that the Merger constitutes a "Change of Control"
for purposes of the options previously granted to the Executive
(the "Options") pursuant to the Company's incentive stock option
plans (the "Option Plans"). Notwithstanding the provisions of
Section 1.02(e)(ii)(E) of the Merger Agreement, the Company shall
treat the Options as stock appreciation rights ("SARs") to the
maximum extent permitted by the Option Plans and, upon the
Closing Date, shall pay to the Executive the cash value of such
SARs calculated in accordance with the terms of such Option
Plans, provided, however, that such payment, in the written
opinion of KPMG Peat Marwick & Co., does not jeopardize the
utilization of the pooling method of accounting for the Merger.
Section 5. Profit Sharing Benefits. As provided by
Section 4.9 of the Employment Agreement, the Company shall pay to
the Executive upon the Closing Date a lump sum amount
(representing the "profit sharing equalization amount" under
Section 2 of the Company's Benefit Equalization Plan) equal to
$5,207 multiplied by the number of months (or part thereof) in
the period that commences on the Closing Date and ends on
December 31, 2001.
Section 6. Pension Benefits. As provided in
Section 4.9 of the Employment Agreement, the Executive shall be
entitled to a combined pension benefit under all of the qualified
and nonqualified defined benefit pension plans now maintained by
the Company (calculated in accordance with the formula specified
in the Revised United Counties Trust Company Retirement Plan (the
"Retirement Plan") without regard to the limitations under
Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986,
as amended) commencing on the Closing Date assuming (i) the
Executive had 29 years and 9 months of credited "Continuous
Service," (ii) his "Average Final Compensation" equaled $382,000
and (iii) for purposes of determining his Accrued Benefit only,
he had attained age 60 years and 2 months as of the effective
date of the termination of his employment. For purposes of
calculating the present value of such pension benefit, an
interest rate assumption of 6 1/2% and the UP-1984 Mortality
Table shall be used. The Company shall pay to the Executive the
present value of the pension benefit calculated as provided in
the previous sentence in a lump sum on the Closing Date;
provided, however, that the lump sum shall in no event exceed
$900,000 and the portion of the combined pension benefit payable
under the Retirement Plan shall be paid in accordance with the
terms of the Retirement Plan.
Section 7. Consulting Arrangements. Commencing on the
Closing Date and continuing until the earlier of (i) December 31,
2000 and (ii) the death of the Executive (the "Period"), the
Executive shall be retained by the Company as a consultant to
advise the Company regarding the operations of the Company,
subject to the following terms and conditions (the "Consulting
Services"):
(a) In no event shall the Executive be required
to provide more than 50 hours of Consulting Services in any
calendar month during the Period or to provide more than 250
hours of Consulting Services during any period of 12 consecutive
calendar months during the Period.
(b) In no event shall the Executive be required
to provide Consulting Services during the month of February in
each year during the Period.
(c) The Executive shall provide such Consulting
Services commensurate with the Executive's prior experience as
may be reasonably requested by the Chief Executive Officer of the
Company from time to time and at mutually agreeable times. Such
Consulting Services may be provided in person (subject to the
limitations of clause (d) below), telephonically or by
correspondence.
(d) The Executive shall not be required to
provide Consulting Services outside a 50 mile radius of Cranford,
New Jersey.
(e) In consideration of the Executive's agreement
to provide Consulting Services hereunder, the Company shall
(i) pay the Executive a monthly consultant fee of $12,500 in
advance on or about the first day of each and every month during
the Period, (ii) reimburse the Executive for any reasonable
out-of-pocket expenses he may incur with the Company's prior
approval in providing Consulting Services hereunder, and
(iii) provide the Executive during the Period with such employee
welfare benefits (including but not limited to hospitalization,
medical, dental, disability insurance coverage) as the Company
provides to its senior employees during the Period. The fee
payable pursuant to clause (i) above shall be appropriately
increased effective January 1 of each calendar year during the
Period to reflect increases in the Federal Consumer Price Index
applicable to the New York Metropolitan Area.
(f) Upon the conclusion of the Period, the
Executive shall be eligible to participate in such welfare
benefit provisions as the Company provides to its retired
executive employees. Such benefits shall be determined based on
the Executive's date of hire by the Company (April 1, 1972), and
the Executive shall receive service credit for the Period as if
he had been a full-time employee during the Period.
(g) Notwithstanding anything in this Section to
the contrary, the Company's obligation to make payments in
Section 7(e) shall terminate immediately in the event of the
Executive's death during the Period.
Section 8. Non-Disparagement. Neither the Company nor
the Executive shall make any public statement (whether written or
oral) which libels, defames, slanders or otherwise disparages the
other.
Section 9. Payment of Benefits to Survivor. In the
event of the death of the Executive prior to the Closing Date,
the amounts otherwise payable to the Executive under the
Employment Agreement shall be paid to the person designated by
the Executive as his beneficiary under the respective plan under
which such benefit is payable or, if no beneficiary has been
effectively specified, to the Executive's spouse.
Section 10. Perquisites. On the Closing Date, the
Company shall transfer to the Executive title to the automobile
currently provided to the Executive by the Company, and shall
"gross-up" his imputed income with respect to such transfer in
such amount as may be necessary to satisfy any tax payable by the
Executive in connection with such transfer and such "gross-up."
In addition, for a period of five years after the Closing Date,
the Company shall provide the Executive with a suitable private
office (with private telephone) and secretarial assistance at an
appropriate location in a first class building in Springfield,
Summit, Kenilworth or Cranford, New Jersey, without cost to the
Executive.
Section 11. Maintenance of Certain Insurance. For the
period specified in the Merger Agreement, the Company shall
obtain and maintain in full force and effect a directors and
officers liability policy satisfying the provisions of the Merger
Agreement.
Section 12. Withholdings; Payments. The Company may
directly or indirectly withhold from any payments made under this
Agreement all Federal, state, city or other taxes and all other
deductions as shall be required pursuant to any law or
governmental regulation or ruling or pursuant to any contributory
benefit plan maintained by or on behalf of the Company. Except
as expressly provided in this Section 12, all amounts payable by
the Company hereunder shall be paid without offset or deduction
of any kind whatsoever. All payments required to be made
hereunder shall be made by one or more checks payable to the
order of the payee specified herein or, if requested by such
payee not less than two business days prior to the date specified
for payment, by wire transfer to an account specified by the
payee.
Section 13. Consolidation, Merger, or Sale of Assets.
Nothing in this Agreement shall preclude the Company from
consolidating or merging into or with, or transferring all or
substantially all of its assets to, or engaging in any other
business combination with, any other person or entity which
assumes this Agreement and all obligations and undertakings of
the Company hereunder. This Agreement shall be assumed by
Meridian upon the consummation of the Merger.
Section 14. No Attachment. Except as required by law,
no right to receive payments under this Agreement shall be
subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation or to
execution, attachment, levy, or similar process or assignment by
operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect
provided, however, that nothing in this Section 14 shall preclude
the assumption of such rights by executors, administrators or
other legal representatives of the Executive or his estate and
their assigning any rights hereunder to the person or persons
entitled thereto.
Section 15. Notices. All notices or other
communications required or permitted hereunder shall be in
writing and shall be delivered personally, by facsimile or sent
by certified, registered or express air mail, postage prepaid,
and shall be deemed given when so delivered personally, or by
facsimile, or if mailed, five days after the date of mailing, as
follows:
If to the Company: Four Commerce Drive
Cranford, New Jersey 07016
Telephone: (908) 931-6715
Facsimile: (908) 709-1583
Attention: President
With a copy to: Pitney, Hardin, Kipp & Szuch
200 Campus Drive
Florham Park, New Jersey 07932-0950
Telephone: (201) 966-6300
Facsimile: (201) 966-1550
Attention: Ronald Janis, Esq.
If to the
Executive: 5 Carteret Court
Madison, NJ 07940
Telephone: (201) 822-0306
With a copy to: Lowenstein, Sandler, Kohl,
Fisher & Boylan
65 Livingston Avenue
Roseland, New Jersey 07068
Telephone: (201) 992-8700
Facsimile: (201) 992-5820
Attention: John D. Schupper, Esq.
or to such other address as any party hereto shall notify the
other parties hereto (as provided above) from time to time.
Section 16. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the internal laws
of the State of New Jersey, without reference to the choice of
law principles thereof. Each of the parties hereto irrevocably
submits to the non-exclusive jurisdiction of the courts of the
State of New Jersey and the United States District Court for the
District of New Jersey for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of
process in connection with any such suit, action or proceeding
may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under
this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or
proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of
any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum.
Section 17. Entire Agreement. This Agreement shall
constitute the entire agreement among the parties with respect to
the matters covered hereby and shall supersede all previous
written, oral or implied understandings among them with respect
to such matters. Except as expressly modified hereby, the
Employment Agreement shall continue in full force and effect.
Section 18. No Third Party Beneficiaries. This
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors, assigns
and legal representatives. This Agreement shall be for the sole
benefit of the parties to this Agreement and their respective
heirs, successors, assigns and legal representatives and is not
intended, nor shall be construed, to give any person, other than
the parties hereto, and their respective heirs, successors,
assigns and legal representatives, any legal or equitable right,
remedy or claim hereunder.
Section 19. Amendments. This Agreement may only be
amended or otherwise modified, and compliance with any provision
hereof may only be waived, by a writing executed by all of the
parties hereto. The provisions of this Section 19 may only be
amended or otherwise modified by such a writing.
Section 20. Defined Terms. Capitalized terms used
herein shall have the respective meanings ascribed thereto in the
Merger Agreement, unless otherwise defined herein.
Section 21. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original, and all of which shall together be
deemed to constitute one and the same instrument.
Section 22. Reimbursement of Expenses. The Company
shall reimburse the Executive on demand for the reasonable fees
and disbursements of counsel to the Executive incurred in
connection with the preparation, negotiation and implementation
of this Agreement and the Merger Agreement. In the event that
the Executive is required to threaten or institute any action,
suit or proceeding to compel the Company's performance of its
obligations hereunder, the Company shall, in addition to the
other amounts payable by it hereunder, reimburse the Executive
for the reasonable out-of-pocket expenses (including the
reasonable fees and disbursements of counsel and other experts
retained by the Executive for such purpose) incurred by the
Executive in connection therewith (including, but not limited to,
costs incurred in investigating any such claim or preparing any
pleadings or other papers relating thereto).
Section 23. Effect of Termination of the Merger
Agreement. In the event that the Merger Agreement is terminated
for any reason (other than as a result of the consummation of the
Merger), this Agreement shall immediately terminate and be of no
further force and effect; provided, however, that the provisions
of Section 22 hereof shall survive any such termination.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be duly executed by the undersigned thereunto duly
authorized, and the Executive has signed this Agreement, all as
of the date first written above.
Attest: UNITED COUNTIES BANCORPORATION
/s/ Alice R. Cadby
Alice R. Cadby By: /s/ Donald S. Nowicki
Secretary Authorized Signatory
Donald S. Nowicki, President
/s/ Eugene H. Bauer
Eugene H. Bauer
Acknowledged and Agreed to,
this 23rd day of May, 1995.
MERIDIAN BANCORP, INC.
By: /s/ Samuel A. McCullough
Authorized Signatory
Attest:
/s/ William L. Gaunt
